Advertisement
Richard Lanigan, Cardiogenesis President stated, "We are excited about ourprogress in year over year quarterly revenue growth of 69%, and deliveringsolid operating income. We believe this to be the result of progress inexecuting on our new customer pipeline, as well as an increasing interest inthe utility of Transmyocardial Revascularization (TMR) and our advancedplatform on the part of clinicians. The positive cash flow from operationswill facilitate new initiatives for our advanced delivery devices, thePEARL(R) 5.0 Robotic delivery system and the PHOENIX combination deliverysystem." He continued, "The FDA approved PEARL 5.0 is designed for use withsurgical robots. In the expanding role of minimally invasive cardiovascularsurgery, the PEARL 5.0 enables TMR treatment of patients with refractoryangina without the need for a sternotomy or thoracotomy. The PHOENIX combinesTMR with the precise injection of biologics. The initial clinical resultspresented on the combination therapy of TMR plus platelet rich plasma (PRP)and TMR plus stem cells is very encouraging and, if proven, will expand therole for TMR. We believe we have a significant opportunity today, as well asa product pipeline to further expand the role for our proprietary technology."
Advertisement
Second Quarter Financial Results
Sales in the second quarter of 2008 totaled $4,119,000, a 69% increasefrom the prior year second quarter sales of $2,436,000. The higher revenue inthe current year quarter is primarily attributable to a $1,350,000 increase incapital sales, and a $331,000, or 17%, increase in disposable handpiecerevenue as compared with the prior year quarter. Of the $331,000 increase inhandpiece revenue, $234,000 relates to revenue which had been previouslydeferred and became recognizable during the quarter.
Sales in the first six months of 2008 totaled $7,101,000, an increase ofapproximately 22% from sales of $5,806,000 in the first six months of 2007.The year to date increase as compared with the prior year period is primarilyattributable to a $1,246,000, or 127%, increase in capital sales and a$71,000, or 2%, increase in disposable handpiece revenue.
The Company reported second quarter 2008 operating income of $582,000 ascompared with an operating loss of $256,000 in the prior year quarter. Netincome for the quarter was $602,000, or $0.01 per diluted share, as comparedwith a net loss of $255,000, or $0.01 per diluted share, in the 2007 secondquarter.
For the first six months of 2008, Cardiogenesis reported operating incomeof $545,000 as compared with $209,000 for the same period in the prior year.The net income for the first six months of 2008 was $566,000, or $0.01 perdiluted share, compared with $72,000, or $0.00 per diluted share, for thefirst six months of 2007.
Gross margin was 86% of sales for the quarter ended June 30, 2008 ascompared with a 78% gross margin in the second quarter of 2007. Gross profitin absolute dollars increased by $1,624,000 to $3,529,000 in the current yearquarter as compared with $1,905,000 for the 2007 second quarter. The increasein gross profit for the three month period is primarily attributed to higherlaser unit sales, an increase in the average laser sales price, andrecognition of $234,000 of deferred revenue for which there is no associatedcost of goods sold. In addition, the cost of goods sold in the prior yearquarter included certain inventory impairment charges that did not recur inthe current year.
For the six months ended June 30, 2008, gross margin was 84% of netrevenues as compared to 80% of net revenues for the six months ended June 30,2007. Gros
