Cardiac Pathways Reports Results for Fourth Fiscal Quarter 2001; Sales Increase 78%, Chilli Catheter Revenues Increase 60% Over Q4 `00.Business Editors 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.--(BUSINESS WIRE)--July 26, 2001 Cardiac Pathways Corporation (Nasdaq:CPWY), today reported results for its fourth fiscal quarter and full year ended June 30, 2001. Sales for the fourth quarter of fiscal 2001 increased 78% to $3,669,000 compared to $2,066,000 for the fourth quarter of fiscal 2000. Sales growth included a 60% increase in worldwide Chilli(R) Cooled Ablation ablation /ab·la·tion/ (-shun) 1. separation or detachment; extirpation; eradication. 2. removal or destruction, especially by cutting. ab·la·tion n. Catheters. The Company recorded a net loss for the fourth quarter of fiscal 2001 of $3,919,000, compared to a net loss of $4,117,000 in the fourth quarter of fiscal 2000. Losses incurred in the fourth quarter include $600,000 of expenses related to the definitive agreement for Boston Scientific The Boston Scientific Corporation (NYSE: BSX) (abbreviated BSC), is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a range of interventional medical specialties, including interventional cardiology, peripheral interventions, to acquire Cardiac Pathways. Net loss applicable to common stockholders for the fourth quarter of fiscal 2001 was $4,669,000 or $0.52 per share compared to a net loss of $4,997,000 or $2.32 per share for the fourth quarter of fiscal 2000. Net loss applicable to common stockholders for the quarters ended June 30, 2001 and June 30, 2000 reflect the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of dividends related to Series B preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . On a proforma Proforma A financial projection based on assumptions. basis, the loss per share assuming the Series B preferred stock was converted to equivalent shares of common stock at the end of the period would be $0.32 per share for the fourth quarter of fiscal 2001 and $0.58 per share for the fourth quarter of fiscal 2000. Sales for the twelve months ended June 30, 2001 were $13,264,000 compared to $6,821,000 for the twelve months of fiscal 2000. Net loss was $13,792,000 for the twelve months ended June 30, 2001 with a net loss applicable to common shareholders of $16,796,000 or $2.73 per share compared to a net loss of $16,367,000 with a net loss applicable to common shareholders of $20,627,000 or $10.05 per share for the twelve months of fiscal 2000. Net loss applicable to common stockholders for the full year ended June 30, 2001 and June 30, 2000 reflect the accrual of dividends related to the outstanding issuance of Series B preferred stock. On a proforma basis, the loss per share with Series B preferred stock converted to equivalent shares of common stock at the end of the period would be $1.41 per share for the full year ended June 30, 2001 and $2.43 per share for the twelve months ended June 30, 2000. Boston Scientific Agreement to Acquire Cardiac Pathways Corporation On June 29, 2001, Boston Scientific Corporation and Cardiac Pathways announced the signing of a definitive agreement for Boston Scientific to acquire Cardiac Pathways in an all cash transaction for a purchase price of approximately $115 million, or $5.267 per common share. The transaction, which will be accomplished by a cash tender offer and follow-on merger, is expected to close in the third calendar quarter of 2001. The tender offer for the common shares of Cardiac Pathways commenced on July 10, 2001 and is conditioned upon approval by regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities and other customary conditions. Management and certain stockholders of Cardiac Pathways holding a majority of Cardiac Pathways voting securities have agreed to support the acquisition by tendering their common shares into the tender offer or selling their securities to Boston Scientific. The Cardiac Pathways board unanimously voted to recommend the tender offer. Preferred Stock and Compliance with Nasdaq National Market Continued Listing Requirements Listing requirements Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. During the third quarter of fiscal 2001, the Company was advised that the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. dividend, redemption and liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy preference features of the Series B preferred stock cause a presumption A conclusion made as to the existence or nonexistence of a fact that must be drawn from other evidence that is admitted and proven to be true. A Rule of Law. If certain facts are established, a judge or jury must assume another fact that the law recognizes as a logical that the stock is mandatorily redeemable Redeemable Eligible for redemption under the terms of an indenture. for financial reporting purposes. In response, the Company restated its financial statements for the year ended June 30, 2000 and for the subsequent interim periods to exclude the Series B preferred stock from total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. . As a result of this reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. , the Company has fallen out of compliance with the $4 million net tangible assets Net Tangible Assets Calculated as the total assets of a company, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities and the par value of preferred stock. Also known as "net asset value" or "book value". continued listing requirement of the Nasdaq National Market. Staff at the Nasdaq has advised the Company that it is deferring any action with respect to the delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. of the Company's common stock until August 31, 2001, as long as the Company's merger with Boston Scientific is in process. Upon completion of the merger, the Company has agreed to voluntarily seek delisting from the Nasdaq National Market. In addition, on April 24, 2001, the staff at the Nasdaq advised the Company that it had failed to maintain a minimum market value of public float of $5 million as required by the rules of the Nasdaq National Market. On July 16, 2001, staff at the Nasdaq notified the Company that the market value of its public float was in excess of $5 million and therefore the Company was in compliance with this listing requirement. This release contains certain 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. that involve a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including actions relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc regulatory matters, the extent to which the Company's products (including the Chilli product line and RPM (1) (Revolutions Per Minute) With electric and electronics devices, RPM measures the rotational speed of the motor's spindle. Floppy disks rotate at 300 RPM, while hard disks rotate from 3,000 to 15,000 RPM. Tracking System) gain market acceptance, the costs and timing of expansion of product development, manufacturing, marketing and sales activities, general economic conditions, competitive developments, the characterization A rather long and fancy word for analyzing a system or process and measuring its "characteristics." For example, a Web characterization would yield the number of current sites on the Web, types of sites, annual growth, etc. of the Series B preferred stock for financial accounting purposes, and the risk that Boston Scientific and Cardiac Pathways businesses will not be integrated successfully. Further information on potential factors that may impact future operations are included in the Company's Form 10-K/A for the year ended June 30, 2000 and subsequent quarterly reports in Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission, and available through www.sec.gov. Earnings Release Conference Call Cardiac Pathways will hold an earnings release conference call at 7:00 a.m. Pacific Daylight Time; 10:00 a.m. Eastern Daylight Time on July 26, 2001. The conference call will be accessible via dial-in at 888/214-7576 and the audio can be heard live via www.streetfusion.com. Audio for the conference call will be archived and accessible at www.streetfusion.com and the Cardiac Pathways web site www.cardiac.com. About Cardiac Pathways Cardiac Pathways develops, manufactures and markets minimally invasive invasive /in·va·sive/ (-siv) 1. having the quality of invasiveness. 2. involving puncture of the skin or insertion of an instrument or foreign material into the body; said of diagnostic techniques. systems to diagnose diagnose /di·ag·nose/ (di´ag-nos) to identify or recognize a disease. di·ag·nose v. 1. To distinguish or identify a disease by diagnosis. 2. and treat cardiac tachyarrhythmias (abnormally rapid heart rhythms Noun 1. heart rhythm - the rhythm of a beating heart cardiac rhythm regular recurrence, rhythm - recurring at regular intervals atrioventricular nodal rhythm, nodal rhythm - the normal cardiac rhythm when the heart is controlled by the ). The Company is a pioneer and leader in the development of complete integrated mapping and ablation systems for the diagnosis and treatment of heart rhythm disturbances.
FINANCIAL HIGHLIGHTS FOLLOW
CARDIAC PATHWAYS CORPORATION
Consolidated Statement of Operations Data
Three months ended Year ended
(Amounts in thousands/
except per share data) June 30, June 30,
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
(unaudited) (unaudited)
Net sales $ 3,669 $ 2,066 $ 13,264 $ 6,821
Cost of goods sold 2,873 2,037 10,505 6,868
-------- -------- -------- --------
Gross margin 796 29 2,759 (47)
Operating expenses:
Research and development 1,292 1,582 4,888 6,947
Selling, general and
administrative 3,065 2,726 11,896 10,064
-------- -------- -------- --------
Total operating expenses 4,357 4,308 16,784 17,011
-------- -------- -------- --------
Loss from operations (3,561) (4,279) (14,025) (17,058)
Other income (expense), net(1) (358) 162 233 691
-------- -------- -------- --------
Net loss (3,919) (4,117) (13,792) (16,367)
Preferred stock dividend 750 880 3,004 3,300
Beneficial conversion
feature related to the
issuance of the Series B
preferred stock -- -- -- 960
-------- -------- -------- --------
Net loss applicable to common
stockholders $ (4,669) $ (4,997) $(16,796) $(20,627)
======== ======== ======== ========
Net loss per share -- basic
and diluted ($ 0.52) ($ 2.32) ($ 2.73) ($ 10.05)
======== ======== ======== ========
Shares used in computing net
loss per share -- basic and
diluted 9,037 2,150 6,146 2,053
======== ======== ======== ========
Consolidated Balance Sheet Data
June 30, June 30,
------------------
2001 2000(2)
-------- --------
(unaudited)
Cash and short term investments $ 22,298 $ 12,625
Working capital 20,912 12,173
Total assets 33,461 21,765
Long-term obligations 8,547 4,900
Redeemable Convertible Preferred Stock 26,828 26,828
Stockholders' deficit (7,850) (13,980)
Results for the three months and year ended June 30, 2001 reflect the
accrual of dividends related to the Series B Convertible Preferred
Stock. Results for year ended June 30, 2000 reflect the discount or
beneficial conversion feature related to the issuance of the Series B
Convertible Preferred Stock as well as the accrual of dividends
related to the Series B Convertible Preferred Stock.
(1) Other income (expense), net for the fourth quarter of fiscal 2001
includes $600,000 of expenses related to the definitive agreement
for Boston Scientific to acquire Cardiac Pathways.
(2) Derived from audited financial statements -- As restated.
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