ArthroCare Continues Rapid Growth On Strength of Arthroscopy Business; Second Quarter Revenues Double.SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif.--(BW HealthWire)--July 28, 1998--ArthroCare Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ARTC ARTC Arthrocare Corp (stock symbol) ARTC Australian Rail Track Corporation ARTC Air Route Traffic Control ARTC Association de la Recherche Theatrale au Canada ARTC Andean Root and Tuber Crops ) today reported revenues of $5.7 million in the second quarter of 1998, double the $2.8 million achieved in the second quarter of 1997. Acceptance of the company's Arthroscopic System among physicians and hospitals continued to expand, driving the company's fifth consecutive quarter of triple digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. revenue growth. During the second quarter, ArthroCare introduced commercial products based on the company's patented Coblation(TM) technology in the cosmetic surgery cosmetic surgery, plastic surgery for cosmetic purposes, such as the improvement of the appearance of the face by removing wrinkles or reshaping the nose. and ENT ENT ears, nose, and throat (otorhinolaryngology). ENT abbr. ear, nose, and throat ENT ear, nose and throat. ENT Ears, nose & throat; formally, otorhinolaryngology markets. Revenue contribution from those markets was minimal in the period. Market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" expanded significantly as the company shipped over 800 controllers during the quarter, more than double the record controller shipments in the first quarter of 1998. Over 90 percent of controller shipments went to arthroscopic accounts. Wand sales exceeded 42,000 units. During the quarter, ArthroCare introduced five new wands Wands may refer to:
"We are successfully maintaining our focus on the arthroscopy Arthroscopy Definition Arthroscopy is the examination of a joint, specifically, the inside structures. The procedure is performed by inserting a specifically designed illuminated device into the joint through a small incision. business, while beginning to commercialize ArthroCare's patented Coblation technology in additional soft tissue markets," said Michael A. Baker Michael Allen Baker (Captain, USN, Ret.) is the International Space Station Program Manager for International and Crew Operations, at NASA's Johnson Space Center. He is responsible for the coordination of program operations, integration and flight crew training and support , ArthroCare's president and chief executive officer. "During the quarter we introduced five new arthroscopy wands and started ramping up for upcoming launches in the ENT and cosmetic surgery markets, while significantly increasing volume in the arthroscopy business. We are pleased our manufacturing organization continues to meet these challenges and improve gross margin." For the second quarter of 1998, the company reported a net loss of $1.1 million, or $.12 per share. Included in the reported net loss is $0.4 million in other income, attributable to various milestone payments and amortization of licensing fees. Excluding these payments, which are associated with development of ArthroCare's proprietary Coblation technology in the ENT and cardiology cardiology Medical specialty dealing with heart diseases and disorders. It began with the 1749 publication by Jean Baptiste de Sénac of contemporary knowledge of the heart. Diagnostic methods improved in the 19th century, and in 1905 the electrocardiograph was invented. markets, the net loss would have been $1.5 million, or $.16 per share. In the second quarter of 1997, ArthroCare's net loss was $2.0 million, or $.23 per share. For the first six months of 1998, ArthroCare reported revenues of $10.5 million compared with $5.1 million in the same period of the previous year. The company reported a net loss for the first half of 1998 of $0.8 million, or $.09 per share. The net loss for the first half of 1998 includes $2.7 million of other income attributable to various milestone payments and amortization of licensing fees. In the comparable period a year ago, the company posted a net loss of $4.2 million, or $.47 per share. At July 4, 1998, cash, cash equivalents, and available-for-sale securities stood at $17.5 million. "Acceptance of our unique Coblation technology in arthroscopy is providing the financial and market leverage to commercialize our technology more broadly", said Baker. "We have developed and are implementing an aggressive strategic plan to duplicate DUPLICATE. The double of anything. 2. It is usually applied to agreements, letters, receipts, and the like, when two originals are made of either of them. Each copy has the same effect. our success in arthroscopy in additional soft-tissue surgical markets. As we move forward, we believe our strong market alliances and our ability to execute to plan will drive us toward our ultimate goal of becoming the leader in soft tissue surgical technology." ArthroCare has developed a broad technology platform for operating on soft tissue that the company plans to commercialize across a wide range of surgical applications. The technology is based on a patented method of tissue removal, called Coblation technology, that is designed to improve the effectiveness and safety of standard surgical methods. Coblation technology uses radio frequency (RF) energy to remove tissue through a significantly cooler process than is possible with traditional electrosurgery electrosurgery /elec·tro·sur·gery/ (-ser´jer-e) surgery performed by electrical methods; the active electrode may be a needle, bulb, or disk.electrosur´gical e·lec·tro·sur·ger·y n. . Coblation-assisted surgery has the potential to improve operative OPERATIVE. A workman; one employed to perform labor for another. 2. This word is used in the bankrupt law of 19th August, 1841, s. 5, which directs that any person who shall have performed any labor as an operative in the service of any bankrupt shall be precision and efficiency compared with many standard surgical techniques and thereby reduce pain and speed recovery. Except for historical information, this press release includes forward -looking statements that involve risks and uncertainties, including, but not limited to, the early stage of commercialization of ArthroCare's current non-arthroscopic products; quarterly fluctuations in results; the management of growth; the competitive environment; and risks as detailed from time to time in the company's Securities and Exchange Commission filings, including the company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended April 4, 1998. Actual results may differ materially from management expectations. ArthroCare Corporation is a medical device company redefining the standard in soft tissue surgery by developing, manufacturing, and marketing patented Coblation(TM) technology that allows surgeons to operate with increased precision and accuracy, with minimal damage to surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. tissue. The company's systems are being used to perform many types of closed joint surgery, and have recently been introduced for use in cosmetic surgery and ear, nose and throat (ENT) surgery. ArthroCare's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategy includes applying its patented platform technology to a broad range of other soft tissue surgical fields including cardiology, dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. , urology urology Medical specialty dealing with the urinary system and male reproductive organs. It traces its origin to medieval lithologists, itinerant healers who specialized in surgical removal of bladder stones. , gynecology gynecology (gīn'əkŏl`əjē), branch of medicine specializing in the disorders of the female reproductive system. Modern gynecology deals with menstrual disorders, menopause, infectious disease and maldevelopment of the , and oral and general surgery. The company is headquartered at 595 North Pastoria Avenue, Sunnyvale, California Sunnyvale ([sʌniveil]) is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley. As of the 2000 census, the city population was 131,760. 94086. Its telephone number is 408/736-0224. ArthroCare's web site can be found at http://www.arthrocare.com. -0-
ARTHROCARE CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended For the Six Months Ended
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
Net sales $ 5,673 $ 2,832 $ 10,544 $ 5,093
Cost of sales 3,145 1,994 5,995 3,673
Gross margin 2,528 838 4,549 1,420
Operating expenses:
Research and
development 1,155 873 2,140 1,753
Sales and
marketing 2,422 1,386 4,538 2,751
General and
administrative 713 927 1,924 1,818
Total operating
expenses 4,290 3,186 8,602 6,322
Loss from operations (1,762) (2,348) (4,053) (4,902)
Interest, license fees
and other income, net 668 359 3,212 746
Net Loss $(1,094) $(1,989) $ (841) $(4,156)
Net loss per common
share and per common
share assuming
dilution $ (0.12) $ (0.23) (0.09) (0.47)
Share used in computing
net loss per common
share and per common
share-assuming
dilution 8,914 8,806 8,902 8,795
ARTHROCARE CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
July 4, January 3,
ASSETS 1998 1998
(Unaudited)
Current assets
Cash, cash equivalents,
and available-for-sale securities $14,874 $18,862
Accounts receivable, net 3,806 2,223
Inventory 3,744 2,019
Prepaid expenses 544 210
Total current assets 22,968 23,314
Available-for-sale securities 2,635 1,010
Property and equipment, net 2,165 1,412
Related party receivables 886 876
Other assets 76 63
Total assets $28,730 $26,675
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,742 $ 968
Accrued liabilities 2,649 2,004
Deferred Revenue 875 --
Total current liabilities 5,266 2,972
Deferred rent 150 157
Total liabilities 5,416 3,129
STOCKHOLDERS' EQUITY
Stockholders' equity 23,314 23,546
Total liabilities and
stockholders' equity $28,730 $26,675
CONTACT: ArthroCare Corporation
Christine Hanni, 408/736-0224 (CFO)
or
Scher Communications
Susan Scher, 415/546-6700 (Press)
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