CryoCath Announces Fiscal 2008 Second Quarter Results

Tuesday, May 13, 2008 General News
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MONTREAL, May 12 /PRNewswire-FirstCall/ - CryoCath(R) Technologies Inc.,the global leader in cryotherapy products to treat cardiac arrhythmias, todayannounced financial results for the second quarter, ended March 31, 2008.

"This has been a strong quarter from a commercial point of view, toppedoff with achieving some outstanding milestones in the weeks following." saidJan Keltjens, President and CEO of CryoCath. "The uptake of Arctic Front inEurope and other markets is strong and is fuelling global growth. Achievingthe 270 consented patients milestone in the STOP AF trial is a significantstep towards achieving our goal of U.S. approval. We are looking forward tocompleting therapies and obtaining 12-month follow-up data from the trial inthe second calendar quarter of 2009. Supported by the successful financing, wecan move full steam ahead and drive commercial expansion of Arctic Front,create the required capacity increase and support ongoing innovation."

Financial Results

The Company's total revenue reached $10.2 million in the second quarter offiscal 2008, a 9.3% decline as compared to $11.3 million for the correspondingperiod in 2007, including sales from the divested surgical business of $3.8million. For the six-month period ending March 31, 2008, total revenues were$18.9 million, a 11.3% decline as compared to $21.3 million in the same perioda year ago, including sales from the divested surgical business of $7.3million.

EP disposable revenues for the second quarter were $6.7 million, or agrowth of 21.9% as compared to $5.5 million for the second quarter of 2007.U.S. sales of these products were $3.0 million, as compared to $3.6 million.This 17.2% decline was impacted by negative movements in exchange rate of13.6%. OUS sales of these products were $3.7 million as compared to $1.9million, or a growth of 98%.

Other EP revenues, which consist of console sales and rentals, as well asvarious accessories and services, for the second quarter were $3.5 million, a82.9% growth, as compared to $1.9 million for the second quarter of 2007. USsales of these products were $2.0 million, a 39.8% increase as compared to$1.4 million. OUS sales of these products were $1.5 million, as compared to$0.5 million.

Gross profits for the second quarter of fiscal 2008 were $5.5 million,54.0% of sales compared with $7.1 million or 63.4% of sales in the secondquarter of fiscal 2007. On a six-month year-to-date basis, gross margins were$10.0 million or 53.0% of sales, versus $13.2 million or 62.2% of sales fromthe same period a year ago. The difference is primarily due to volume loss dueto the surgical portfolio divestiture combined with a product mix in favor oflower margin consoles which are showing rapid growth ahead of disposable salesgrowth.

Net research and development expenses for the quarter ended March 31, 2008were $3.4 million compared to $2.7 million in the same quarter last year. On asix-month year-to-date basis, R&D expenses were $5.6 million compared to $4.8million in the same period in 2007. The change is entirely related to theacceleration of enrollment in our STOP AF IDE pivotal trial.

The Company's sales and marketing expenses for the second quarter of 2008decreased to $5.4 million compared to $6.4 million in the same period lastyear. On a six-month year-to-date basis, sales and marketing expenses were$9.7 million versus $11.9 million for the same period a year ago. The changeis a result of the surgical portfolio divestiture with the elimination ofcommissions and fees combined with increasing efficiencies in the sales andmarketing process.

Administrative expenses for the second quarter of 2008 were $2.7 millioncompared with $2.3 million for the same period last year. On a six-monthyear-to-date basis, administrative expenses were $5.4 million versus $3.9million for the same period a year ago. The change is


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