BioSphere Medical Reports Second Quarter 2004 Financial Results.ROCKLAND Rockland, industrial town (1990 pop. 16,123), Plymouth co., E Mass.; settled 1673, set off from Abington and inc. 1874. There is light manufacturing. , Mass. -- Consolidated Revenue Up 3.3%; Net Loss Decreased 12% from Prior Year Period, Including a Non-routine Charge for Inventory Write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. BioSphere biosphere, irregularly shaped envelope of the earth's air, water, and land encompassing the heights and depths at which living things exist. The biosphere is a closed and self-regulating system (see ecology), sustained by grand-scale cycles of energy and of Medical, Inc. (Nasdaq: BSMD), a medical device company that pioneered the use of bioengineered microspheres to treat uterine fibroids Uterine Fibroids Definition Uterine fibroids (also called leiomyomas or myomas) are benign growths of the muscle inside the uterus. They are not cancerous, nor are they related to cancer. , hypervascularized tumors and vascular malformations Vascular malformation A poorly formed blood or lymph vessels. Mentioned in: Birthmarks by occluding their blood supply, today reported its financial results for the second quarter ended June June: see month. 30, 2004. Highlights --Worldwide product revenue in the second quarter increased 3.3% from corresponding quarter of prior year --Local marketing focus shows positive impact on key account growth --Net loss in the quarter decreased 12% to $2.24 million ($0.16 loss per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), impacted by a special inventory write-down charge of $913,000, from $2.54 million ($0.19) in the corresponding prior year --Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the quarter decreased 33% to $3.11 million from $4.62 million from the corresponding quarter in the prior year. Review of Financial Results For the second quarter of 2004, BioSphere Medical reported consolidated revenues of $3.23 million, an increase of approximately 3.3% compared with consolidated revenues of $3.12 million in the corresponding 2003 period. The company reported a consolidated net loss of $2.24 million, or ($0.16) per basic and diluted share, for the second quarter of 2004. This compares with a consolidated net loss of $2.54 million, or ($0.19) per basic and diluted share, for the second quarter of 2003. The Company incurred a non-routine inventory write-down charge of $913,000 in the quarter ended June 30, 2004, resulting from disposition of inventory produced prior to recent process improvements. Consolidated revenues for the six-month period ended June 30, 2004 were $6.41 million compared with $6.17 million for the same six-month period in 2003, a gain of 3.8%. Consolidated net loss for the six-month period ended June 30, 2004 decreased 19.5% to $3.80 million, or $0.28 per share, compared with a net loss of $4.72 million, or $0.36 per share, in the same period of 2003. At June 30, 2004, cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has were $4.66 million. Management Comments on Progress Commenting on the Company's results, Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. A. Looney, BioSphere Medical's Chairman, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President stated, "Although our revenue growth was 3.3% when compared to the prior year period, we are enthused by events this past quarter that, we believe, signal positive growth potential for the UFE UFE Uterine Fibroid Embolization UFE United for a Fair Economy UFE Ufficio Federale dell'Energia UFE Uniform Final Examination UFE Urban Challenge Final Event (DARPA) UFE Unidentified Flags and Ensigns UFE Unrestricted Free Agent business. For example, we saw growth in demand at larger UFE accounts, we are getting positive reception to our microcatheter, and we believe we are maintaining market share despite increasing competition. Also, even though our net loss for the quarter was impacted by a non-routine charge for inventory write-down, we are pleased that our underlying gross margin is improving." Mr. Looney continued, "We believe that upcoming national awareness events, including acceptance of our UFE clinical trial data by a peer-review journal and expected positive national media coverage of the benefits of UFE, could have market-wide impact and stimulate increased referrals and increased patient interest in UFE. We continue to believe our local marketing focus is effective and is working to reinforce the brand equity we created for our proprietary products. As a result, we look forward to continued improvement in the second half of 2004." The Company will host its quarterly conference call today at 11 A.M. ET. The number to dial into the teleconference is (719) 457-2600 and the access code is 428529. Please call in approximately ten minutes before the call is scheduled to begin. A live web cast of the conference call will also be available on the BioSphere Medical web site: www.biospheremed.com. A replay of the teleconference will be available from 2:00 P.M. (ET) today, July July: see month. 29, 2004 until 12:00 A.M. (ET) on August 4th, 2004 by dialing (719) 457-0820 or can also be accessed from the investor section of our company website at www.biospheremed.com. About BioSphere Medical, Inc. BioSphere Medical, Inc., based in Rockland, Massachusetts Rockland is a town in Plymouth County, Massachusetts, United States. The population was 17,670 at the 2000 census. with 10,199 total registered voters as of December 31, 2005. , is a medical device company focused on applying our proprietary microsphere Not to be confused with Glass microphere. This article largely refers to micropheres or protein protocells as small spherical units postulated by some scientists as a key stage in the origin of life. technology to medical applications using embolotherapy techniques. Our core technologies, patented bio-engineered polymers and manufacturing methods, are used to produce miniature spherical spher·i·cal adj. Having the shape of or approximating a sphere; globular. beads with uniquely beneficial properties for a variety of medical applications. Our principal focus is the treatment of symptomatic symptomatic /symp·to·mat·ic/ (simp?to-mat´ik) 1. pertaining to or of the nature of a symptom. 2. indicative (of a particular disease or disorder). 3. uterine fibroids using a procedure called uterine fibroid embolization Uterine Fibroid Embolization Definition Uterine fibroids are growths in the muscular tissue of the womb (uterus). Uterine fibroid embolization is non-surgical removal of the growths through the use of a tubular device called a catheter. , or UFE. Our products have already begun to gain wide acceptance in this rapidly emerging procedure as well as in a number of other new and established medical treatments. Our strategy is two fold. First, we are seeking to grow the embolotherapy business worldwide, specifically the UFE procedure, by increasing awareness of availability of this procedure. Second, we are seeking to maintain our current technology leadership by introducing new products and product improvements, both through internally developed and externally acquired technologies, that improve and broaden the use of embolotherapy techniques. BioSphere Medical has received clearance in many countries, including the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Australia and the European Community European Community: see European Union. European Community (EC) Organization formed in 1967 with the merger of the European Economic Community, European Coal and Steel Community, and European Atomic Energy Community. , which allow the Company to sell its products for use in general embolization embolization /em·bo·li·za·tion/ (em?bo-li-za´shun) 1. the process or condition of becoming an embolus. 2. therapeutic introduction of a substance into a vessel in order to occlude it. procedures, including uterine fibroid embolization. Cautionary Statement Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. - This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements with respect to the Company's expectations that it will achieve revenue growth in the second half of 2004 and will increase market acceptance for its products. The Company uses words such as "plans," "seeks," "projects," "believes," "may," "anticipates," "estimates," "should'" and similar expressions to identify these forward-looking statements. These statements are subject to risks and uncertainties and are based upon the Company's beliefs and assumptions. There are a number of important factors that may affect the Company's actual performance and results and the accuracy of its forward-looking statements, many of which are beyond the Company's control and are difficult to predict. These important factors include, without limitation, risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc : the failure of the Company and its distributors to successfully market and sell the Company's products; the failure of the Company to achieve or maintain necessary regulatory approvals, either in the United States or internationally, with respect to the manufacture and sale of its products and product candidates; the failure of the Company to successfully develop, commercialize and achieve widespread market acceptance of the Embosphere(R) Microspheres and EmboGold(TM) Microsphere technologies; risks relating to the Company's ability to obtain and maintain patent and other proprietary protection for its products; the absence of or delays and cancellations of, product orders; delays, difficulties or unanticipated costs in the introduction of new products; competitive pressures; the inability of the Company to raise additional funds in the near term to finance the development, marketing, and sales of its products; and general economic conditions. These risk factors are further described in the section titled "Certain Factors That May Affect Future Results of Operations" in the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 30, 2004, as filed by the Company with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company's estimates as of the date of this release. The Company anticipates that subsequent events and developments may cause its forward-looking statements to change. The Company specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this press release. Financial Tables Follow
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SELECTED FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
As of June 30, 2004 and December 31, 2003
(in thousands, unaudited)
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June 30, December 31,
2004 2003
--------------------------
ASSETS
Cash, cash equivalents and marketable
securities $ 4,662 $ 7,575
Accounts receivable, net 2,447 2,534
Inventories, net 2,615 3,496
Prepaid and other current assets 418 405
Property and equipment, net 1,329 1,497
Goodwill, net 1,443 1,443
Other assets 52 52
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Total assets $ 12,966 $17,002
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 2,228 $ 3,157
Debt and capital lease obligations 454 320
Stockholders' equity 10,284 13,525
--------------------------
Total liabilities and stockholders'
equity $ 12,966 $17,002
==========================
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the three and six months ended June 30, 2004 and 2003
(in thousands, except per share amounts, unaudited)
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Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------
2004 2003 2004 2003
------------------------------------------------
Product revenues $ 3,226 $ 3,122 $ 6,406 $ 6,172
Costs and expenses:
Cost of product
revenues 2,288 1,231 3,850 2,257
Research and
development 619 819 1,208 1,526
Sales 1,120 1,331 2,344 2,755
Marketing 652 1,499 1,116 2,786
General and
administrative 714 966 1,519 1,833
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Total costs and
expenses 5,393 5,846 10,037 11,157
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Loss from operations (2,167) (2,724) (3,631) (4,985)
Other income and
expenses, net (76) 181 (169) 266
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Net loss $(2,243) $(2,543) $(3,800) $(4,719)
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Net loss per common
share
Basic and diluted $ (0.16) $ (0.19) $ (0.28) $ (0.36)
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Weighted average common shares
outstanding
Basic and diluted 14,079 13,333 13,462 13,281
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