North American Scientific Reports Fiscal Fourth Quarter and Full Year 2006 Results.* ClearPath[TM] Breast Brachytherapy Products On Track For Fiscal 2007 Launch * Fifth Consecutive Quarter of Year-Over-Year Radiation Sources Revenue Growth CHATSWORTH, Calif. -- North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Scientific, Inc. (Nasdaq:NASI (1) (NetWare Asynchronous Service Interface) A protocol from Novell for connecting to modems in a communications server. It was derived from the NCSI protocol. NASI provides more advanced features than the common int 14 (interrupt 14) method. ) today announced financial results for its fiscal fourth quarter and fiscal year ended October 31, 2006. For the fourth quarter of fiscal 2006, the Company reported revenues of approximately $6.3 million, and a net loss of $6.1 million, or $0.21 per share. For fiscal year 2006, the Company reported revenues of approximately $29.0 million, and a net loss of $17.1 million or $0.78 per share. "Throughout fiscal 2006 we worked diligently to strengthen North American Scientific's position as a leading provider of innovative cancer treatment options to patients and doctors," said L. Michael Cutrer, president and chief executive officer of North American Scientific. "While we were very disappointed with the 21% decline in IMRT/IGRT revenues in the fourth quarter of fiscal 2006 compared to the prior year, we were pleased with the continued growth in our Radiation Sources business in the fourth quarter of fiscal 2006." Mr. Cutrer continued, "We have made progress in executing our strategy to expand our portfolio of opportunities with a variety of product and services launches as well as new regulatory approvals, including our ClearPath breast brachytherapy product line. When we announced our breast brachytherapy initiative in March 2006, our goal was to introduce the product at the American Society for Therapeutic Radiology and Oncology (ASTRO) Annual Meeting in November 2006, which we achieved. This exciting new opportunity will allow us to enter the breast cancer treatment This article or section recently underwent a major revision or rewrite and needs further review. You can help! The mainstay of breast cancer treatment is surgery when the tumor is localized, with possible adjuvant hormonal therapy (with tamoxifen or an aromatase market, which we believe will significantly increase the size of our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market. At this time we are targeting initial commercialization in our second fiscal quarter. As previously discussed, initial sales and patient data will be limited to a few key sites. This will allow us to evaluate product performance and physician and patient feedback. Assuming there are no design issues, we would be in broad scale commercialization later in the second half of our 2007 fiscal year." Mr. Cutrer continued, "Following are some of the important milestones achieved by the Company in fiscal year 2006: Brachytherapy * Achieved fifth consecutive quarter of year-over-year sales growth in Radiation Sources * Received FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. approval for the new SurTrak line of brachytherapy strands and preloaded needle kits * Received FDA clearance for both high-dose rate and low-dose rate ClearPath designs * Signed agreement with Novation The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party , LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control to offer Prospera brachytherapy sources to member hospitals * Introduced ClearPath products at ASTRO in November 2006 IMRT/IGRT * Received FDA clearance to market nomosSTAT[TM] "Serial Tomotherapy Advance Treatment" system in 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. * Hosted Radiation Oncology radiation oncology n. The branch of radiology that deals with the use of ionizing radiation to treat cancers. radiation oncology and IMRT IMRT Intensity-modulated radiation therapy Radiation oncology A format for delivering high-dose RT to regions–eg, nasopharynx, that are surrounded by radiation-sensitive areas; in IMRT, a broad radiation field is divided into hundreds of small pencil beams, Technology symposium in China * Provided Complete nomosSTAT[TM] Serial Tomotherapy Solution to leading oncology center in the U.S." Fourth Quarter Financial Results For the fourth quarter of fiscal 2006, the Company reported revenues of approximately $6.3 million compared with revenues of $6.9 million for the fourth quarter of 2005. The decrease from the prior year was due to a 21% decline in product and service revenues from sales of IMRT/IGRT (Intensity Modulated mod·u·late v. mod·u·lat·ed, mod·u·lat·ing, mod·u·lates v.tr. 1. To adjust or adapt to a certain proportion; regulate or temper. 2. Radiation Therapy and Image Guided Radiation Therapy) products, partially offset by a 9% increase in Radiation Sources revenues. "While our Radiation Sources business, which includes brachytherapy seeds, steadily grew throughout fiscal 2006, our IMRT/IGRT business remained challenging," continued Mr. Cutrer. "We were very disappointed with the IMRT/IGRT sales in the fourth quarter and believe that we have taken steps to improve the financial performance of this sector going forward. Since the approval of nomosSTAT in July 2006, we have continued to focus our efforts on strengthening our sales and marketing efforts for this business unit and we have completed the first installation of the product. We are encouraged by the level of market interest for both new nomosSTAT systems as well as sites wishing to upgrade their older systems to a nomosSTAT unit. We continue to believe that nomosSTAT provides a unique solution to customers wanting to deliver cutting-edge cancer treatment without making a large-scale investment in a new linear accelerator linear accelerator: see particle accelerator. linear accelerator or linac Type of particle accelerator that imparts a series of relatively small increases in energy to subatomic particles as they pass through a sequence of and we are actively exploring opportunities to leverage our technology into future sales growth." Mr. Cutrer continued, "We were pleased with our continued growth in our Radiation Sources business. This is the fifth consecutive quarter of year-over-year sales growth for that business segment. Revenues grew 9% in the fiscal fourth quarter and 5% during fiscal year 2006. We have continued to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our agreements with Premier and Novation to offer our Prospera brachytherapy sources to their member hospitals and our agreement with Oncura to distribute Prospera Pd-103 brachytherapy sources, which has resulted in continued sales growth. Looking ahead to fiscal 2007, we believe these agreements as well as our ability to provide other specialized services to the market through our SurTRAK[TM] line of products should continue to provide important growth in this sector in fiscal 2007." Revenues by operating segment in the fourth quarter of 2006 included $3.0 million of IMRT/IGRT products and services, and $3.3 million from Radiation Sources (brachytherapy and other radioisotope-based products). The net loss for the fourth quarter of 2006 was $6.1 million, or $0.21 per share, compared with the net loss for the fourth quarter of 2005 of $44.6 million, or $2.65 per share. The $38.5 million decrease in the net loss was primarily due to a write-down of goodwill and intangible assets of $40.2 million in the fourth quarter of 2005 which did not recur in the fourth quarter of 2006, partially offset by the following items in the fourth quarter of 2006: (i) a decrease in gross profit of $0.6 million resulting primarily from lower IMRT/IGRT product and service revenue, (ii) severance expense of $0.5 million, (iii) $0.2 million in stock compensation expense as a result of the implementation of Statement of Financial Accounting Standards 123 (R) at the beginning of fiscal year 2006, and (iv) a $0.4 million increase in research and development and marketing expenses related to the development of ClearPath[TM]. Fiscal Year Financial Results For fiscal year 2006, the Company reported revenues of approximately $29.0 million compared with revenues of $32.2 million reported for fiscal year 2005, primarily due to reduced IMRT/IGRT product and service revenue. Revenues by operating segment for fiscal year 2006 included $16.4 million of IMRT/IGRT products and services, and $12.6 million from Radiation Sources (brachytherapy and other radioisotope-based products). Radiation Sources revenues in fiscal year 2006 increased 5% from fiscal year 2005 due to increased shipments of brachytherapy seeds. IMRT/IGRT revenues in fiscal year 2006 decreased 19% from fiscal 2005. The net loss for fiscal year 2006 was $17.1 million, or $0.78 per share, compared with the net loss for fiscal year 2005 of $55.5 million, or $3.36 per share. The $38.4 million decrease in the net loss was primarily due to a write-down of goodwill and intangible assets of $40.2 million in the fourth quarter of 2005 which did not recur in the fourth quarter of 2006, and a $2.8 million reduction in 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. resulting from cost reductions in fiscal 2006, partially offset by the following items in fiscal year 2006: (i) a decrease in gross profit of $2.3 million resulting primarily from lower IMRT/IGRT product and service revenue, (ii) $1.1 million in legal fees related to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , (iii) $0.9 million in stock compensation expense as a result of the implementation of Statement of Financial Accounting Standards 123 (R) at the beginning of fiscal year 2006, and (iv) an increase in interest and other expense of $0.3 million primarily due to increased debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay . At October 31, 2006, the Company's cash 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 totaled $9.3 million, an increase of $5.7 million from $3.6 million at the end of fiscal year 2005. The Company had no debt outstanding on its bank lines of credit or any other borrowings at October 31, 2006. ClearPath[TM] Breast Brachytherapy Launch On November 7, 2006, the Company announced the introduction of ClearPath, its unique multicatheter breast brachytherapy device for Accelerated Partial Breast Irradiation (APBI APBI Accelerated Partial Breast Irradiation APBI Alliance Pet Business International APBI Advanced Planning Briefings for Industry APBI Advanced Planning for Business and Industry ), at the ASTRO Annual Meeting in Philadelphia. The ClearPath systems are placed through a single incision incision /in·ci·sion/ (in-sizh´un) 1. a cut or a wound made by cutting with a sharp instrument.incis´ional 2. the act of cutting. in·ci·sion n. 1. and are designed to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the resection cavity, allowing for more conformal con·for·mal adj. 1. Mathematics Designating or specifying a mapping of a surface or region upon another surface so that all angles between intersecting curves remain unchanged. 2. therapeutic radiation dose distribution following lumpectomy Lumpectomy Definition A lumpectomy is a type of surgery used to treat breast cancer. It is considered "breast-conserving" surgery because in a lumpectomy, only the malignant tumor and a surrounding margin of normal breast tissue are compared to other methods of APBI. ClearPath is designed to accommodate either high-dose, ClearPath-HDR, or low-dose rate, ClearPath-CR, treatment methods. The Company received 510k approval from the United States FDA for a low-dose rate, or continuous release treatment utilizing the Company's Prospera[R] brachytherapy seeds in April 2006 and approval for the high-dose rate treatment in November 2006. Mr. Cutrer continued, "We were very pleased with the response from physicians at ASTRO and from our ongoing market assessment of the ClearPath design. We are anticipating initial product sales beginning in our second fiscal quarter through a staged rollout in key medical sites, with full commercialization planned for the second half of fiscal year 2007. With our impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. entry into the breast brachytherapy market, we will expand our portfolio of cancer therapies with what we expect to be a best-in-class product, strengthening our position as a leading innovator in cancer care. We will provide updates as we move forward." Commenting on fiscal 2007 plans, Mr. Cutrer added, "Fiscal 2006 was a particularly challenging year for our NOMOS NOMOS Knowledge Acquisition for Normative Reasoning System division and the IMRT/IGRT sector. We have implemented significant changes that we expect should strengthen the division and allow us to achieve improved top-line and bottom-line results. While we remain optimistic regarding nomosSTAT sales and NOMOS' performance in 2007, we are reviewing various strategic options with respect to the IMRT/IGRT business sector including strategic partnerships. We have engaged CIBC World Markets CIBC World Markets is the investment banking division of the Canadian Imperial Bank of Commerce. It helps governments, large companies, and other large institutions obtain capital and credit and is a primary dealer in U.S. Treasury securities. Corporation as a financial advisor to assist us in identifying strategic opportunities that could enhance shareholder value." Mr. Cutrer concluded, "Our entire organization has expended significant effort in new product development in fiscal 2006 and we believe we are on the verge On the Verge (or The Geography of Yearning) is a play written by Eric Overmyer. It makes extensive use of esoteric language and pop culture references from the late nineteenth century to 1955. of benefiting from this effort in 2007 in both IRMT/IGRT and brachytherapy business segments. We are very excited about the planned ClearPath launch and believe we have positioned the Company for significant financial improvements during fiscal 2007." Conference Call Today A live webcast to discuss North American Scientific's fiscal fourth quarter and fiscal year 2006 financial results will be available over the Internet through the Company's Web site at www.nasmedical.com in the Investor Center beginning at 1:30 p.m. PST/4:30 p.m. EST on January 11, 2007. For the live event, listeners should go to the Web site at least fifteen minutes before the event starts to download and install any necessary audio software. For those who cannot listen to the live webcast, a replay of the call will be available at the same site shortly after the call. A taped replay of the call will be available beginning approximately one hour after the call's conclusion and will remain available for seven days. It can be accessed by dialing 800-405-2236 for domestic callers and 303-590-3000 for international callers, using the passcode 11079302#. About North American Scientific North American Scientific is a leader in radiation therapy products and services in the fight against cancer. Its innovative products provide physicians with tools for the treatment of various types of cancers. They include Prospera[R] brachytherapy seeds and SurTRAK[TM] needles and strands used primarily in the treatment of prostate cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. . In addition the Company plans to commercialize its ClearPath[TM] multi-channel catheter breast brachytherapy devices in 2007, which are the only devices approved for both high dose and continuous release, or low dose, radiation treatments. The devices are designed to provide flexible, precise dose conformance and an innovative delivery system that is intended to offer the more advanced form of brachytherapy for the treatment of breast cancer. North American Scientific also provides external beam radiation therapy products for Serial Tomotherapy Intensity Modulated Radiation Therapy (IMRT) and Image-Guided Radiation Therapy Image-guided radiation therapy (IGRT) is the process of frequent two and three-dimensional imaging, during a course of radiation treatment, used to direct radiation therapy utilizing the imaging coordinates of the actual radiation treatment plan. (IGRT IGRT Image Guided Radiation Therapy ). Serial tomotherapy IMRT allows an escalated radiation dose to be delivered to a tumor while limiting exposure and damage to nearby healthy tissue. These products are marketed under the trade names nomosSTAT[TM]and CORVUS([R]) (our proprietary treatment planning In radiotherapy, Treatment Planning is the process in which a team consisting of radiation oncologists, medical radiation physicists and dosimetrists plan the appropriate external beam radiotherapy treatment technique for a patient with cancer. Typically, medical imaging (i.e. software). The Company's IGRT products, BAT[R], BATCAM BATCAM Battlefield Air Targeting Camera Autonomous Micro Air Vehicle [TM] and nTRAK[TM], provide fast and accurate targeting and localization Customizing software and documentation for a particular country. It includes the translation of menus and messages into the native spoken language as well as changes in the user interface to accommodate different alphabets and culture. See internationalization and l10n. of a treatment volume on a daily basis. More than 500 hospitals and research sites worldwide are equipped with the Company's clinically proven serial tomotherapy, inverse treatment planning, image-guidance and ancillary treatment solutions. Please visit www.nasmedical.com for more information. Statements included in this release that are not historical facts may be considered forward-looking statements that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by the Company including, but not limited to, the impact of competitive products and pricing, technological changes, changes in relationships with strategic partners and dependence upon strategic partners for the performance of critical activities under collaborative agreements, the ability of the Company to successfully directly market and sell its products, uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc patent protection and regulatory approval, the stable supply of appropriate isotopes, research and development estimates, market opportunities, risks associated with strategic opportunities or acquisitions the Company may pursue and the risk factors included in the Company's filings with the Securities and Exchange Commission. Any forward-looking statements contained in this news release speak only as of the date of this release, and the Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future results or otherwise. [TABLE OMITTED] [TABLE OMITTED] |
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