Cyberonics cites CMS decision for loss in quarter.

Houston, TX based Cyberonics Inc. reported a loss of $8.2 million compared with a loss of $8.5 million for the same period a year prior. Revenue fell 14% to $29.1 million from $33.7 million. Operating expenses during the quarter fell 18% to $31.4 million from $38.3 million a year earlier.

Domestic sales for the first quarter declined to $23.1 million, primarily due to a "significant reduction" in the number of Vagus Nerve Stimulation (VNS) Therapy systems used for treatment-resistant depression (TRD) following a non-coverage determination by the Centers for Medicare and Medicaid Services, the company said. International net sales increased 44.6% from $4.1 million to $6 million.

In May, the company laid off about 15% of its workforce. Additional layoffs were announced in August. As a result of the layoffs, in addition to other cost control efforts, Cyberonics expects" significant cost savings" at the beginning of the third quarter, according to a recent statement released by the company.

"Despite our challenges with the TRD indication, US epilepsy sales experienced some growth, and we continued to achieve double-digit growth in our international sales," said Dan Moore, Cyberonics' president and CEO. "We believe we will further increase sales of VNS Therapy for epilepsy patients, and our recent management changes are aimed at that objective. We also plan to initiate a new study to enhance the clinical foundation for reimbursement in TRD. We expect to see ongoing improvement in our financial results as the current fiscal year progresses."

The fiscal first quarter ended July 27 and the fiscal year ends April 27.