IRVINE, Calif., Aug. 13 /PRNewswire-FirstCall/ -- Cardiogenesis
Corporation (Pink Sheets: CGCP), a leading developer of surgical
products used in the treatment of patients suffering from severe
angina, today reported financial results for its second quarter
ended June 30, 2009. Net revenues in the second quarter of 2009
totaled $2,236,000, a 46% decrease from the prior year second
quarter net revenues of $4,119,000. The decrease in net revenue for
the three months ended June 30, 2009 results primarily from the
absence of laser sales in the current year quarter. Net revenues in
the first six months of 2009 totaled $5,088,000, a decrease of
approximately 28% from net revenues of $7,101,000 in the first six
months of 2008. The year to date decrease as compared with the
prior year period is primarily attributable to a $1,459,000, or
66%, decrease in laser sales and a $635,000, or 15%, decrease in
disposable handpiece revenue. Paul McCormick, Executive Chairman,
noted, "Although we face a very challenging capital equipment
environment, we are pleased to note that total domestic handpiece
revenue was up sequentially, which we believe to be an early
response to our marketing strategy to focus on building the revenue
stream from its consumables by re-engaging the cardiology
community. We plan on providing more detail on our growth
strategies on today's conference call." The Company reported a
second quarter 2009 operating loss of $562,000 as compared with an
operating income of $582,000 in the prior year quarter. The net
loss for the quarter was $590,000 or $0.01 per basic and diluted
share, as compared with net income of $602,000, or $0.01 per basic
and diluted share in the 2008 second quarter. For the first six
months of 2009, Cardiogenesis reported an operating loss of
$859,000 as compared with operating income of $545,000 for the same
period in the prior year. The net loss for the first six months of
2009 was $904,000, or $0.02 per basic and diluted share, compared
with net income of $566,000, or $0.01 per basic and diluted share,
for the first six months of 2008. The gross margin percentage was
83% of net revenues for the quarter ended June 30, 2009 as compared
with 86% in the second quarter of 2008. Gross profit in absolute
dollars decreased by $1,684,000 to $1,845,000 for the current year
second quarter as compared with $3,529,000 for the 2008 second
quarter. For the six months ended June 30, 2009, the gross margin
percentage was 82% of net revenues as compared to 84% for the six
months ended June 30, 2008. Gross profit in absolute dollars
decreased by $1,825,000 to $4,161,000 for the six months ended June
30, 2009, as compared to $5,986,000 for the six months ended June
30, 2008. The decrease in the gross margin percentage and gross
profit in dollars for the six month period is primarily attributed
to a decrease in laser sales. Research and development expenses
were $346,000 in the second quarter of 2009 as compared with
$252,000 in the 2008 second quarter. Year to date, R&D expenses
of $634,000 were $166,000 or 35% above the prior year period of
$468,000. The dollar increase for the three and six months ended
June 30, 2009 was primarily attributed to the recent submissions to
the Food and Drug Administration related to the Premarket Approval
Application for the PEARL 8.0 handpiece and the pre-Investigational
Device Exemption to initiate a feasibility trial for the PHOENIX
handpiece. Sales and marketing expenses of $1,272,000 in the
quarter ended June 30, 2009 decreased $523,000, or 29%, compared
with $1,795,000 for the quarter ended June 30, 2008. For the six
months ended June 30, 2009, S&M expenditures totaled
$2,741,000, a decrease of $581,000, or 17%, compared with
$3,322,000 for the six months ended June 30, 2008. The decrease in
sales and marketing expenditures for the three and six months ended
June 30, 2009 was primarily due to a decrease in salary and other
employee related expenses as a result of lower commissions and
decreased travel expense. General and administrative expenses for
the quarter ended June 30, 2009 totaled $789,000 as compared to
$900,000 during the quarter ended June 30, 2008. This represents a
decrease of $111,000, or 12%. For the six months ended June 30,
2009, G&A totaled $1,645,000 as compared to $1,651,000 for the
six months ended June 30, 2008. This represents a reduction of
$6,000, or less than 1%. About Cardiogenesis Corporation
Cardiogenesis is a medical device company specializing in the
treatment of cardiovascular disease and is a leader in devices that
treat severe angina. Our market leading holmium:YAG laser system
and single use fiber-optic delivery systems are used to perform a
FDA-cleared surgical procedure known as Transmyocardial
Revascularization (TMR). For more information on Cardiogenesis and
its products, please visit our website at
http://www.cardiogenesis.com/ or the direct to patient website at
http://www.heartofnewlife.com/. Safe Harbor Statement With the
exception of historical information, the statements set forth above
include forward-looking statements. Any forward-looking statements
in this news release are subject to numerous risks and
uncertainties, many of which are outside the Company's control,
that could cause actual results to differ materially. Factors that
could affect the accuracy of these forward-looking statements
include, but are not limited to: any inability by the Company to
sustain profitable operations or obtain additional financing on
favorable terms if and when needed; any failure to obtain required
regulatory approvals; failure of the medical community to expand
its acceptance of TMR procedures; possible adverse governmental
rulings or regulations, including any FDA regulations or rulings;
the Company's ability to comply with international and domestic
regulatory requirements; possible adverse Medicare or other
third-party reimbursement policies or adverse changes in those
policies; any inability by the Company to ship product on a timely
basis; the Company's ability to manage its growth; the effects of
recent disruptions in global credit and equity markets and other
adverse economic developments that could adversely affect the
market for our products or our ability to raise needed financing;
actions by our competitors; and the Company's ability to protect
its intellectual property. Other factors that could cause
Cardiogenesis' actual results to differ materially are discussed in
the "Risk Factors" section of the Company's Annual Report on Form
10-K for the year ended December 31, 2008 and the Company's other
filings with the Securities and Exchange Commission. The Company
disclaims any obligation to update any forward-looking statements
as a result of developments occurring after the date of this press
release. CARDIOGENESIS CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
(unaudited) Three months ended Six months ended June 30, June 30,
2009 2008 2009 2008 ---- ---- ---- ---- Net revenues $2,236 $4,119
$5,088 $7,101 Cost of revenues 391 590 927 1,115 --- --- --- -----
Gross profit 1,845 3,529 4,161 5,986 ----- ----- ----- -----
Operating expenses: Research and development 346 252 634 468 Sales
and marketing 1,272 1,795 2,741 3,322 General and administrative
789 900 1,645 1,651 --- --- ----- ----- Total operating expenses
2,407 2,947 5,020 5,441 ----- ----- ----- ----- Operating income
(loss) (562) 582 (859) 545 Other income (expense): Interest expense
(21) (1) (31) (21) Interest income 1 21 2 42 --- --- --- --- Total
other income (expense), net (20) 20 (29) 21 ---- -- ---- -- Income
(loss) before income taxes (582) 602 (888) 566 Provision for income
taxes 8 - 16 - --- --- --- --- Net income (loss) (590) 602 (904)
566 ===== === ===== === Net earnings (loss) per share: Basic
$(0.01) $0.01 $(0.02) $0.01 ====== ===== ====== ===== Diluted
$(0.01) $0.01 $(0.02) $0.01 ====== ===== ====== ===== Weighted
average shares outstanding: Basic 45,519 45,293 45,503 45,284
------ ------ ------ ------ Diluted 45,519 45,306 45,503 45,313
------ ------ ------ ------ CARDIOGENESIS CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) June 30, December 31,
2009 2008 (unaudited) (audited) ----------- -------- ASSETS Current
assets: Cash and cash equivalents $2,709 $2,907 Accounts
receivable, net of allowance for doubtful accounts of $7 and $20,
respectively 991 1,330 Inventories 1,036 1,164 Investments in
marketable securities - 75 Prepaids and other current assets 289
395 --- --- Total current assets 5,025 5,871 Property and
equipment, net 397 382 Other assets, net 18 18 --- --- Total assets
$5,440 $6,271 ====== ====== LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Accounts payable $322 $200 Accrued liabilities
936 1,103 Deferred revenue 799 800 Current portion of capital lease
obligations 9 6 --- --- Total current liabilities 2,066 2,109
Capital lease obligations, less current portion 19 13 --- --- Total
liabilities 2,085 2,122 ----- ----- Commitments and Contingencies
Shareholders' equity: Preferred stock: no par value; 5,000 shares
authorized; none issued and outstanding - - Common stock: no par
value; 75,000 shares authorized; 45,549 and 45,487 shares issued
and outstanding, respectively 174,109 173,999 Accumulated deficit
(170,754) (169,850) -------- -------- Total shareholders' equity
3,355 4,149 ----- ----- Total liabilities and shareholders' equity
$5,440 $6,271 ====== ====== DATASOURCE: Cardiogenesis Corporation
CONTACT: William R. Abbott, Senior Vice President and Chief
Financial Officer of Cardiogenesis Corporation, +1-949-420-1800 Web
Site: http://www.cardiogenesis.com/
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