Possis Medical, Inc. Reports First Quarter Results; Company Meets EPS Guidance; Peripheral Revenue Up 71% Year-Over-Year; Total Revenue Slightly Below Guidance.MINNEAPOLIS -- Possis Medical, Inc. (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 :POSS) today reported sales of $15.5 million for the first quarter ended October 31, 2005, versus $17.5 million in the year-ago period, and $16.3 million in the fourth quarter of fiscal 2005. U.S. AngioJet(R) Rheolytic(TM) Thrombectomy thrombectomy /throm·bec·to·my/ (throm-bek´tah-me) surgical removal of a clot from a blood vessel. throm·bec·to·my n. Excision of a thrombus. System sales System sales is a business term used in the franchising industry. Franchisors provide supplies, marketing and administration services to franchisees in return for a part of the franchisees' revenues. Some franchisors also operate some outlets directly. in the current quarter totaled $15.0 million, down $2.2 million from the year-ago period. Net income per diluted share for the first quarter of fiscal 2006, on a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, was $266,000 or $0.01 per diluted share, which includes stock-based compensation expense of $702,000, net of tax, or $0.04 per diluted share, due to the implementation of FAS 123(R). Net income prior to fiscal 2006 did not include stock-based compensation expense. Including the pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma stock-based compensation expense previously disclosed in Possis' financial statement footnotes, net income for the first quarter of fiscal 2005 would have been $1.6 million or $0.08 per diluted share, and net income for the fourth quarter of fiscal 2005 would have been $68,000 or $0.00 per diluted share. Non-GAAP (pro forma) net income for the first quarter of fiscal 2006 was $968,000 or $0.05 per diluted share, compared with $2.2 million or $0.11 per diluted share in the first quarter of fiscal 2005, and compared to $1.3 million or $0.07 per diluted share for the fourth quarter of fiscal 2005. Please refer to the non-GAAP (pro forma) Consolidated Statements of Income and Comprehensive Income on page 6; and the table on page 8 reconciling net income per diluted share on a GAAP basis to net income per share on a non-GAAP (pro forma) basis. Robert G. Dutcher, 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. of Possis Medical, said, "As outlined last quarter, we had anticipated that revenue levels in the first quarter would be down sequentially due to seasonality factors and down year-over-year largely due to the results from our AiMI study announced a year ago. Actual revenue for the quarter of $15.5 million just missed our guidance range of $15.9 to $16.2 million due to the combined factors of Hurricanes Katrina and Rita, higher than expected sales force turnover, increased competition, and continuing controversy concerning the role of thrombectomy and embolic embolic /em·bol·ic/ (em-bol´ik) pertaining to an embolus or to embolism. em·bol·ic adj. 1. Relating to, or caused by an embolus or embolism. 2. Relating to emboly. protection in treating STEMI STEMI ST-Segment Elevation Myocardial Infarction (ST segment elevation myocardial infarction myocardial infarction: see under infarction. ) patients. On a franchise basis, coronary sales were most impacted and down somewhat from the stabilized level achieved during the prior two quarters. AV Access sales were also down slightly from the prior quarter. On a much more positive note, peripheral sales exceeded our expectations and continued to lead the way in catheter catheter /cath·e·ter/ (kath´e-ter) 1. a tubular, flexible surgical instrument that is inserted into a cavity of the body to withdraw or introduce fluid. 2. urethral c. sales growth. Sales were positively impacted by increasing therapy adoption and the introduction of the new high-power DVX DVX Digital Voice Exchange DVX Dvd Extended DVX Device Driver (TM) catheter. Year-over-year, the peripheral franchise showed impressive first quarter revenue growth of 71 percent and sequential quarterly growth of 21 percent. Our earnings per share was within our guidance range, both including and excluding expensing stock-based compensation per FAS 123 (R)." The Company sold 47 AngioJet System drive units in the first quarter, compared to 57 drive units one year ago and 50 drive units in the previous quarter. Said Dutcher, "We are pleased with the continued demand for our AngioJet Thrombectomy System from new customers. This growing footprint of AngioJet System drive units provides the necessary installed base to ensure continued penetration in our core markets, and also positions the Company to take advantage of new market opportunities, such as deep vein thrombosis A blood clot (thrombos) in a vein deep within the muscle, typically in the thigh or calf. It is caused by disease or the lack of activity such as sitting for hours at a computer screen. (DVT See deep vein thrombosis. ) and pulmonary embolism Pulmonary Embolism Definition Pulmonary embolism is an obstruction of a blood vessel in the lungs, usually due to a blood clot, which blocks a coronary artery. (PE)." Possis Medical's gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was 73 percent in the first quarter, compared to 75 percent a year ago and 74 percent in the fourth quarter of fiscal 2005. The average catheter utilization rate per installed drive unit, a measure of recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. usage, was 7.5 in the first quarter, compared to 9.3 in the prior-year period and 8.2 in the fourth quarter of fiscal 2005. Selling, general and administrative expenses (SG&A) increased by $837,000 to $8.4 million in the first quarter of fiscal 2006 from the first quarter of fiscal 2005, due primarily to reflecting FAS 123(R) stock-based compensation charges in the current period. The increase in SG&A over the fourth quarter of fiscal 2005 was also primarily stock-based compensation related. First quarter research and development (R&D) spending increased by $72,000 to $2.5 million from the prior-year period due to stock-based compensation expenses partially offset by timing-related spending reductions for completed projects. "We continue to invest heavily in R&D, as a percentage of revenue, because we believe it is a key driver of our future growth," continued Dutcher. "The first quarter of 2006 was the first full quarter of sales for two new catheter models, the DVX(TM), our most powerful catheter, and the XMI (1) (XML Metadata Interchange) An XML-based representation of a UML model. XMI is used to transfer UML diagrams between various modeling tools. See UML. (2) An earlier high-speed bus from Digital that was used in large VAX machines. (R) RX Plus, our second generation rapid-exchange catheter. We expect sales of these products to continue to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale during 2006 and help drive our growth. We now have several key submissions currently waiting for 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, including our new AngioJet Ultra Console and combined thrombectomy sets, and expanded indications for two new catheters to include coronary indications for use. We expect to hear from the FDA on these submissions in early 2006," concluded Dutcher. The Company's cash and 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 position increased slightly to $44.8 million at the end of the first quarter compared to $44.4 million at the end of the fiscal 2005 fourth quarter. This increase is attributable to positive operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. partially offset by $1.1 million in common stock share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. made during the quarter. Product Development Update As illustrated by the recent product launches and regulatory submissions, Possis expects to continue to benefit from its ongoing investment in new and enhanced product designs. For example, in the first quarter of fiscal 2006 the Company introduced the Spiroflex(TM) catheter, another improvement to the 4 Fr rapid-exchange catheter line. This product features a spiral laser cut along the full length of the proximal stainless steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. outer lumen, which is then jacketed with a soft plastic coating. Possis began an initial market evaluation during the quarter and the product was showcased at the October Transcatheter Cardiovascular Therapies (TCT TCT The Capital Times (Madison, WI newspaper) TCT Transcatheter Cardiovascular Therapeutics TCT The Coroner's Toolkit TCT Trans Canada Trail TCT Tcl Core Team TCT Tsukuba College of Technology (Japan) ) 2005 conference in Washington, D.C. "Spiroflex has received rave reviews from customers who have used it. We expect that when approved by the FDA for coronary use, the Spiroflex will rapidly become our flagship coronary catheter," said Dutcher. The Company also reported that, during the first quarter, it took significant steps in advancing its goal to bring its GuardDOG distal occlusion occlusion /oc·clu·sion/ (o-kloo´zhun) 1. obstruction. 2. the trapping of a liquid or gas within cavities in a solid or on its surface. 3. guidewire to market. GuardDOG is a specially designed line of guidewires, featuring a soft, compliant balloon at the distal tip. By inflating the balloon, the operator can temporarily and selectively occlude (programming) occlude - (Or "shadow") To make a variable inaccessible by declaring another with the same name within the scope of the first. blood flow during interventional treatment. Dutcher said, "We are excited by the potential for this product. Physicians tell us that it will help optimize AngioJet thrombectomy, especially in cases of tough peripheral thrombus thrombus /throm·bus/ (throm´bus) pl. throm´bi a stationary blood clot along the wall of a blood vessel, frequently causing vascular obstruction. , and will also minimize the risk of procedure-related 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. . Based on the feedback we are getting from physicians, we are currently developing both .014 and .035 inch diameter GuardDOG occlusion guide wires, and balloons in a range of sizes. We anticipate that the new designs will be filed with the FDA in the first half of our 2006 fiscal year, with a market launch by the end of the year." New Clinical Science On another important and complementary front, Possis Medical is continuing to expand its commitment to sponsor meaningful new clinical science to highlight the value of AngioJet treatment for thrombus. In support of its coronary market, the Company sponsored an evening satellite symposium at the recent TCT2005 conference, the largest annual meeting of interventional cardiologists. The symposium was titled "Developments and New Approaches in the Treatment of Intracoronary Thrombosis thrombosis (thrŏmbō`sĭs), obstruction of an artery or vein by a blood clot (thrombus). Arterial thrombosis is generally more serious because the supply of oxygen and nutrition to an area of the body is halted. with Rheolytic Thrombectomy," and addressed some of the concerns raised by the AiMI results. Dr. Charles Simonton of the Sanger Clinic in Charlotte, North Carolina “Charlotte” redirects here. For other uses, see Charlotte (disambiguation). Charlotte is the largest city in the state of North Carolina and the 20th largest city in the United States. , presented updated coronary AngioJet registry data. Dr. Fadi Matar of Cardioquest in Tampa, Florida “Tampa” redirects here. For other uses, see Tampa (disambiguation). Tampa is a United States city in Hillsborough County, on the west coast of Florida. It serves as the county seat for Hillsborough County.GR6. , presented his positive experience in employing a combination therapy of AngioJet and an embolic protection filter wire to treat high-risk coronary patients. Dr. Ray Matthews of Good Samaritan Hospital Good Samaritan Hospital may refer to: In the United States:
New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. presented on the positive benefits of AngioJet therapy with direct stenting Stent´ing n. 1. An opening in a wall in a coal mine. in a sub-group of coronary patients with large thrombus. In addition, the Company is sponsoring the JETSTENT study of AngioJet treatment in heart attack patients with visible thrombus. In JETSTENT, up to 10 sites, primarily in Europe, will randomize ran·dom·ize tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es To make random in arrangement, especially in order to control the variables in an experiment. 500 heart attack patients to be treated with a combination of AngioJet and stenting, or just stenting alone. The key difference between JETSTENT and AiMI is that all JETSTENT patients must have visible thrombus at baseline, or a total occlusion; and all AngioJet patients will be treated with the specific technique developed by Dr. David Antoniucci of Careggi Hospital, Florence, Italy. The Company expects that approximately 100 patients will be enrolled in JETSTENT by the end of fiscal 2006. Looking out through fiscal 2006, the Company is planning additional presentations of real-world AngioJet coronary treatment experiences. The list includes a round-table discussion of interventional cardiologists at the upcoming ACC See adaptive cruise control. meeting in Atlanta in March and the PCR PCR polymerase chain reaction. PCR abbr. polymerase chain reaction Polymerase chain reaction (PCR) meeting in Paris in May. "Undoubtedly, this is a lot of attention and activity focused on our coronary market," said Dutcher. "Regardless of the results of the AiMI study that were announced about a year ago, this work is critical to our future success and in achieving our growth targets," Dutcher continued. The Company also announced progress on initiatives to address rapidly growing peripheral vascular markets. In fiscal 2006, Possis Medical will deepen its investment in clinical science to develop AngioJet therapy for treating venous venous /ve·nous/ (ve´nus) pertaining to the veins. ve·nous adj. Of, relating to, or contained in the veins. venous pertaining to the veins. thromboembolic thromboembolic pertaining to or emanating from thromboembolism. thromboembolic meningoencephalitis see hemophilosis. thromboembolic parasitism see thromboembolic colic. (VTE VTE Vocational and Technical Education VTE Venous Thrombo Embolism VTE Vacuum Thermal Evaporation VTE Vientiane, Laos - Wattay (Airport Code) VTE Virtual Terminal Environment VTE Video Transfer Engine VTE Video Tape Editing ) disease. This includes both deep vein thrombosis (DVT) and pulmonary embolism (PE). "Since the underlying cause of both these diseases is thrombus, many physicians are interested in treating their patients with AngioJet thrombectomy. We are excited by the potential for this area and estimate the initial market opportunity from treatment of these diseases exceeds $240 million and will grow significantly over the next decade," commented Dutcher. The Company expects to initiate a new IDE (1) (Integrated Development Environment) A set of programs run from a single user interface. For example, programming languages often include a text editor, compiler and debugger, which are all activated and function from a common menu. clinical trial of AngioJet in treating DVT by the end of fiscal 2006. New Reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. Update Possis also announced that the American Medical Association American Medical Association (AMA), professional physicians' organization (founded 1847). Its goals are to protect the interests of American physicians, advance public health, and support the growth of medical science. (AMA (Automatic Message Accounting) The recording and reporting of telephone calls within a telephone system. It includes the calling and called parties and start and stop times of the call. ) has established five new peripheral Current Procedural Terminology Current Procedural Terminology See CPT. (CPT CPT See: Carriage Paid To ) codes for treatments involving the removal of thrombus using mechanical thrombectomy devices. These new codes identify specific types of therapy used in the peripheral vasculature vasculature /vas·cu·la·ture/ (vas´ku-lah-chur) 1. circulatory system. 2. any part of the circulatory system. vas·cu·la·ture n. ; three codes relate to arterial interventions and two are for venous interventions. Based on the new peripheral CPT codes, physicians using AngioJet thrombectomy to treat peripheral arteries Peripheral Arteries are the arteries (specifically arterioles and capillaries) which are furthest from the heart (mouth, hands, and feet). In some cases blockages in the peripheral arteries may be treated with catheterization and balloon dilatation instead of surgery. can expect to be reimbursed in the range of $227 - $393 per procedure, depending on geographic location and the specifics of the overall peripheral vascular treatment. "We expect that these new CPT codes will spur use of the AngioJet System in the treatment of peripheral thrombus. These specific CPT codes will make it far easier for physicians to correctly identify and be reimbursed for the procedures that they have been performing for several years," said Dutcher. These new CPT codes will go into effect on January 1, 2006. Outlook Looking ahead, coronary product sales are projected to be relatively flat sequentially for the balance of fiscal 2006, while peripheral product sales are projected to be up between 10 and 25 percent sequentially per quarter throughout the balance of fiscal 2006. Due to the revised coronary projections, the Company has reduced fiscal 2006 revenue projections from the previously stated guidance of $69 to $74 million to $66 to $70 million. The Company expects gross margins in the low to mid-seventies as a percent of sales and non-GAAP (pro forma) net income of between $0.34 and $0.42 per diluted share for fiscal 2006 versus $0.34 per share for fiscal 2005. Including the impact of FAS 123 (R) stock-based compensation expense, the Company expects net income per diluted share to be in the range of $0.16 to $0.24 for the full fiscal year compared to $0.16 per share for fiscal 2005. Possis anticipates second-quarter revenue to be approximately $15.7 to $16.1 million and net income in the range of $0.01 to $0.03 per diluted share. The impact of expensing stock-based compensation per FAS 123(R) is anticipated to be approximately $0.05 per diluted share for the second quarter and approximately $0.18 per diluted share for fiscal year 2006. The Company will host a conference call on Wednesday, November 23, 2005 at 9:30 am Central Time. Bob Dutcher, Chairman & CEO, and Jules Fisher Jules Fisher (born November 12, 1937) in Norristown, Pennsylvania is a prolific, award-winning, lighting designer and producer. He is credited with lighting designs for more than 200 productions over the course of his 40 year career in Broadway and off-Broadway shows, as well , CFO See Chief Financial Officer. , will discuss the first-quarter operating results and the remainder of fiscal 2006. To join the conference call, dial 888-889-7567 (international - 1-517-645-6377) by 9:25 am (CT), and give the password "Conference" and leader "Mr. Bob Dutcher." A webcast of the conference call can be accessed at www.possis.com under the Investors tab. The webcast can also be accessed at www.fulldisclosure.com for individual investors. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the webcast through a password-protected site at www.streetevents.com. An archived webcast will be available for thirty days. A replay of the conference call will be available from Noon Central Time on Wednesday, November 23rd through Friday, November 25th at 11:59 pm Central Time. Dial toll-free 1-866-509-6763 (toll - 1-203-369-1928). Possis Medical, Inc. develops manufactures and markets pioneering medical devices for the large and growing cardiovascular and vascular treatment markets. The AngioJet(R) Rheolytic(TM) Thrombectomy System is marketed 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. for blood clot blood clot n. A semisolid, gelatinous mass of coagulated blood that consists of red blood cells, white blood cells, and platelets in a fibrin network. removal from native coronary arteries Coronary arteries The two main arteries that provide blood to the heart. The coronary arteries surround the heart like a crown, coming out of the aorta, arching down over the top of the heart, and dividing into two branches. , leg arteries, coronary bypass coronary bypass Surgical treatment for coronary heart disease to relieve angina pectoris and prevent heart attacks. It became widely used in the 1960s. One or more blood vessels—usually an artery in the chest or a vein from the leg—are transplanted to create grafts and AV dialysis dialysis (dīăl`ĭsĭs), in chemistry, transfer of solute (dissolved solids) across a semipermeable membrane. Strictly speaking, dialysis refers only to the transfer of the solute; transfer of the solvent is called osmosis. access grafts. Certain statements in this press release constitute "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. " within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Some of these statements relate to estimated future revenue, gross margins, expenses and earnings per share, regulatory approvals, product introductions, clinical initiatives, and the continuing impact from the results of the AiMI trial. These statements are based on our current expectations and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements such as the effectiveness of our sales and marketing efforts in re-establishing coronary product usage, our ability to effectively manage new product development timelines, and our ability to generate suitable clinical registry data to support growing use of the AngioJet in coronary applications. A discussion of these and other factors that could impact the Company's future results are set forth in the cautionary statements included in Exhibit 99 to the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended July 31, 2005, filed with the Securities and Exchange Commission. This release includes non-GAAP (pro forma) net income, non-GAAP (pro forma) net income per share data, and non-GAAP (pro forma) key business indicators, and other non-GAAP line items from the Consolidated Statements of Income and Comprehensive Income, including cost of medical products, 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. (including selling, general and administrative, and research and development), and provision for income taxes. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP (pro forma) measures used by other companies. Possis believes that the presentation of non-GAAP (pro forma) net income, non-GAAP (pro forma) net income per share data, non-GAAP (pro-forma) key business indicators and other non-GAAP line items from the Consolidated Statements of Income and Comprehensive Income, when shown in conjunction with the corresponding GAAP measures, provides useful information to management and investors regarding financial and business trends relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its financial condition and results of operations. Possis further believes that where the adjustments used in calculating non-GAAP (pro forma) net income and non-GAAP (pro forma) net income per share are based on specific identified charges that impact different line items in the statements of income (including cost of medical products, selling, general and administrative and research and development expense), that it is useful to investors to know how these specific line items in the statements of income are affected by these adjustments. In particular, as Possis begins to apply FAS 123(R), it believes that it is useful to investors to understand how the expenses associated with the application of FAS 123(R) are reflected on its Consolidated Statements of Income and Comprehensive Income.
POSSIS MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
For Three Months Ended
October 31, October 31,
2005 2004
------------ ------------
Product sales................................$15,475,674 $17,501,988
Cost of sales and other expenses:
Cost of medical products.................. 4,230,155 4,304,339
Selling, general and administrative....... 8,393,727 7,556,583
Research and development.................. 2,509,293 2,437,704
------------ ------------
Total cost of sales and other expenses....... 15,133,175 14,298,626
------------ ------------
Operating income............................. 342,499 3,203,362
Interest income.............................. 403,449 286,432
(Loss) Gain on sale of securities............ (6,346) 18,081
------------ ------------
Income before income taxes................... 739,602 3,507,875
Provision for income taxes................... 474,000 1,315,000
------------ ------------
Net income................................... 265,602 2,192,875
Other comprehensive income, net of tax
Unrealized (loss) gain on securities........ (99,000) 125,000
------------ ------------
Comprehensive income......................... $166,602 $2,317,875
============ ============
Net income per common share:
Basic...................................... $0.02 $0.12
============ ============
Diluted.................................... $0.01 $0.11
============ ============
Weighted average number of common shares
assumed outstanding:
Basic...................................... 17,315,847 18,080,940
Diluted.................................... 17,951,037 19,159,308
Note:
Net income for the first quarter of fiscal 2006 includes stock-based
compensation expense of $702,000, net of tax, due to the
implementation of FAS 123(R).
Net income for the first quarter of fiscal 2005 did not include
stock-based compensation expense under FAS 123. The table below
reflects net income and diluted net income per share for the first
quarter of fiscal 2006 compared with first quarter of fiscal 2005
including the pro forma stock-based compensation expense as follows:
Three Months Ended
----------------------------------------------------------------------
October 31, October 31,
2005 2004
----------------------------------------------------------------------
Net income -as reported for the first
quarter of fiscal 2005. $2,192,875
----------------------------------------------------------------------
Stock-based compensation expense, net of tax
- as reported for the first quarter of
fiscal 2005. ($584,000)
----------------------------------------------------------------------
Net income, including the effect of stock-
based compensation expense $265,602 $1,608,875
----------------------------------------------------------------------
Diluted net income per share - as reported
for the first quarter of fiscal 2005. $0.11
----------------------------------------------------------------------
Stock-based compensation expense, net of
tax, per share - as reported for the first
quarter of fiscal 2005. (0.03)
----------------------------------------------------------------------
Diluted net income per share, including the
effect of stock-based compensation expense. $0.01 $0.08
----------------------------------------------------------------------
POSSIS MEDICAL, INC. AND SUBSIDIARIES
NON-GAAP (PRO-FORMA) CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
For Three Months Ended
October 31, October 31,
2005 2004
------------ ------------
Product sales................................$15,475,674 $17,501,988
Cost of sales and other expenses:
Cost of medical products.................. 4,128,155 4,304,339
Selling, general and administrative....... 7,862,727 7,556,583
Research and development.................. 2,320,293 2,437,704
------------ ------------
Total cost of sales and other expenses....... 14,311,175 14,298,626
------------ ------------
Operating income............................. 1,164,499 3,203,362
Interest income.............................. 403,449 286,432
(Loss) Gain on sale of securities............ (6,346) 18,081
------------ ------------
Income before income taxes................... 1,561,602 3,507,875
Provision for income taxes................... 594,000 1,315,000
------------ ------------
Net income................................... 967,602 2,192,875
Other comprehensive income, net of tax:
Unrealized (loss) gain on securities........ (99,000) 125,000
------------ ------------
Comprehensive income......................... $868,602 $2,317,875
============ ============
Net income per common share:
Basic...................................... $0.06 $0.12
============ ============
Diluted.................................... $0.05 $0.11
============ ============
Weighted average number of common shares
assumed outstanding:
Basic...................................... 17,315,847 18,080,940
Diluted.................................... 17,951,037 19,159,308
Note: The impact of FAS 123(R) is excluded from the period ending
October 31, 2005; the period ending October 31, 2004, is shown as
reported.
POSSIS MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
October 31, July 31,
ASSETS 2005 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents................. $4,404,321 $5,257,244
Marketable securities..................... 40,365,735 39,169,811
Trade receivables (less allowance for
doubtful accounts and returns of
$677,000 and $669,000, respectively)..... 8,191,161 8,274,839
Inventories............................... 5,962,800 5,830,204
Prepaid expenses and other assets......... 938,420 1,158,214
Deferred tax asset........................ 1,042,000 1,042,000
------------ ------------
Total current assets......................... 60,904,437 60,732,312
PROPERTY AND EQUIPMENT, net.................. 5,102,407 4,879,221
DEFERRED TAX ASSET........................... 11,820,958 12,113,949
OTHER ASSET.................................. 440,425 425,914
------------ ------------
TOTAL ASSETS.................................$78,268,227 $78,151,396
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable.................... $2,140,551 $1,355,402
Accrued salaries, wages, and commissions.. 2,225,055 3,212,525
Other liabilities......................... 2,440,210 2,468,669
------------ ------------
Total current liabilities............... 6,805,816 7,036,596
OTHER LIABILITIES............................ 609,525 526,914
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock-authorized, 100,000,000
shares of $0.40 par value each; issued
and outstanding, 17,259,137 and
17,326,487 shares, respectively......... 6,903,655 6,930,595
Additional paid-in capital................ 75,841,526 75,725,188
Unearned compensation..................... (6,000) (15,000)
Accumulated other comprehensive loss...... (339,000) (240,000)
Retained deficit..........................(11,547,295) (11,812,897)
------------ ------------
Total shareholders' equity.............. 70,852,886 70,587,886
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...$78,268,227 $78,151,396
============ ============
POSSIS MEDICAL, INC. AND SUBSIDIARIES
AngioJet Key Business Indicators
Q1-05 Q2-05 Q3-05 Q4-05 Q1-06
----------------------------------------------------------------------
U.S. AngioJet Revenue - $17,199 $15,585 $14,690 $15,609 $15,029
$(000)
----------------------------------------------------------------------
U.S. Drive Units Sold 49 49 44 40 42
----------------------------------------------------------------------
U.S. Drive Units in the Field 1,371 1,422 1,461 1,509 1,560
----------------------------------------------------------------------
U.S. Catheter Utilization 9.3 8.3 7.8 8.2 7.5
----------------------------------------------------------------------
Gross Margin % 75% 74% 72% 74% 73%
----------------------------------------------------------------------
Net Income Per Diluted Share Q1-05 Q2-05 Q3-05 Q4-05 Q1-06
Net income per diluted share -
as reported for prior periods
(1) $0.11 $0.09 $0.06 $0.07 N/A
Stock-based compensation
expense, not of tax, per
share (2) $(0.03) $(0.04) $(0.04) $(0.07) $(0.04)
Net income per share including
the effect of stock-based
compensation expense (3) $0.08 $0.05 $0.02 $0.00 $0.01
Notes:
1. Net income and net income per share prior to fiscal 2006 did not
include stock-based compensation expense under FAS 123.
2. Stock-based compensation expense and stock-based compensation
expense per share prior to fiscal 2006 is calculated based on FAS
123 as previously disclosed in Possis' financial statement
footnotes.
3. Net income and net income per share prior to fiscal 2006
represents pro forma information based on FAS 123 as previously
disclosed in Possis' financial statement footnotes.
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