Exhibit 99.1
{ENDOLOGIX, INC. LOGO} | ||
PRESS RELEASE | ||
DATE: | May 8, 2003 | |
CONTACTS: | Paul McCormick, President and Chief Executive Officer, | |
949-595-7200 | ||
David Richards, Chief Financial Officer, 949-595-7200 | ||
www.endologix.com |
Endologix, Inc. Reports 1st Quarter 2003 Results
Irvine, CA — May 8, 2003 — Endologix, Inc., (NASDAQ: ELGX) today announced financial results for the first quarter ended March 31, 2003. Total revenues for the first quarter of 2003 were 34% lower at $1,162,000, compared with $1,768,000 for the first quarter of fiscal 2002. Product revenue increased to $490,000 for the first quarter ended March 31, 2003, from $-0- for the first quarter of fiscal 2002, due to sales of PowerLink AAA products in 2003. License revenues for the quarter ended March 31, 2003 decreased 62% to $672,000 from $1,768,000 from the corresponding period of 2002. License revenues are primarily derived from royalties received from Guidant related to our licensed Focus technology. We believe that the decrease in Guidant license revenues is primarily due to the introduction by Guidant of non-licensed products in the U.S. in 2002 and competition from drug-eluting stent products. We anticipate that Guidant license revenues will continue to decline.
Net loss for the first quarter of 2003 was $(1,190,000), or $(0.05) per share, compared with net income of $548,000, or $0.04 per share, for the same period of fiscal 2002. The results for the first quarter of 2002 reflect expense reductions following the restructuring of the Company in the third quarter of 2001; while the results for the first quarter of 2003 reflect expenses to commercialize the PowerLink AAA technology acquired in May 2002. Research, development and clinical expenses for the first quarter of fiscal 2003 were 82% higher at $1,846,000, compared with $1,017,000 for the first quarter of fiscal 2002. The increase was due primarily to research and development expenditures for PowerLink AAA technology, whereas the research, development and clinical expenses for the first quarter of fiscal 2002 were for continuing clinical studies for our brachytherapy technology. Marketing and sales expenses of $283,000 for the first quarter of 2003 were to support PowerLink AAA distribution. General and administrative expenses decreased 65% to $138,000 for the first quarter of 2003, compared to $398,000 for the same period of 2002. The decrease resulted primarily from a reimbursement to the Company of legal costs and expenses of $468,000, which were previously expensed as general
and administrative expense, as part of a legal settlement with Jomed-Endosonics.
Commenting on the activities of the quarter, Paul McCormick, President & CEO, said, “The results of the first quarter are in line with our financial plans, and the Company continues to execute on its regulatory timelines.”
Endologix, Inc. develops and manufactures minimally invasive treatments for vascular diseases. The Company’s PowerLink System is an endoluminal stent graft for treating AAA. AAA is a weakening of the wall of the aorta, the largest artery in the body, resulting in a balloon-like enlargement. Once AAA develops, it continues to enlarge and, if left untreated, becomes increasingly susceptible to rupture. The overall patient mortality rate for ruptured abdominal aortic aneurysms is approximately 75%, making it the 13th leading cause of death in the United States. Additional information can be found on the Company’s Web site at www.endologix.com.
Except for historical information contained herein, this news release contains forward-looking statements, the accuracy of which are necessarily subject to risks and uncertainties, including reduction of Company revenue resulting from declines in sales of Guidant’s royalty-bearing products, and the unpredictability of clinical trials and regulatory approval, changes in future economic, competitive and market conditions, uncertainty of acceptance in the marketplace and future business decisions, adequacy of financial resources to support operations after December 31, 2003 and our ability to raise capital, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Endologix, and the risk factors and other matters set forth in the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2002.
ENDOLOGIX, INC..
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three Months Ended March 31, | ||||||||||||
2003 | 2002 | |||||||||||
Revenues: | ||||||||||||
Product | $ | 490 | $ | -- | ||||||||
License | 672 | 1,768 | ||||||||||
Total revenues | 1,162 | 1,768 | ||||||||||
Cost of product sales | 257 | 69 | ||||||||||
Gross profit | 905 | 1,699 | ||||||||||
Operating expenses: | ||||||||||||
Research, development and clinical | 1,846 | 1,017 | ||||||||||
Marketing and sales | 283 | -- | ||||||||||
General and administrative | 138 | 398 | ||||||||||
Minority interest | (17 | ) | (8 | ) | ||||||||
Total operating expenses | 2,250 | 1,407 | ||||||||||
Income (loss) from operations | (1,345 | ) | 292 | |||||||||
Other income (expense): | ||||||||||||
Interest income | 154 | 226 | ||||||||||
Gain on sale of assets | 3 | 34 | ||||||||||
Other income (expense) | (2 | ) | (4 | ) | ||||||||
Total other income | 155 | 256 | ||||||||||
Net income (loss) | $ | (1,190 | ) | $ | 548 | |||||||
Basic earnings (loss) per share | $ | (0.05 | ) | $ | 0.04 | |||||||
Shares used in computing basic earnings (loss) per share | 24,047 | 13,157 | ||||||||||
Diluted earnings (loss) per share | $ | (0.05 | ) | $ | 0.04 | |||||||
Shares used in computing diluted earnings (loss) per share | 24,047 | 13,277 | ||||||||||
ENDOLOGIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
March 31, | December 31, | |||||||||
2003 | 2002 | |||||||||
ASSETS | ||||||||||
Cash, cash equivalents and marketable securities | $ | 8,046 | $ | 7,659 | ||||||
Accounts receivable, net | 405 | 622 | ||||||||
Other receivables | 734 | 1,004 | ||||||||
Inventories | 1,949 | 2,043 | ||||||||
Other current assets | 368 | 431 | ||||||||
Total current assets | 11,502 | 11,759 | ||||||||
Property and equipment, net | 161 | 185 | ||||||||
Marketable securities | 572 | 2,051 | ||||||||
Goodwill and other intangibles, net | 19,189 | 19,541 | ||||||||
Other assets | 375 | 371 | ||||||||
Total Assets | $ | 31,799 | $ | 33,907 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities | $ | 1,666 | $ | 2,348 | ||||||
Minority interest | 67 | 83 | ||||||||
Total liabilities | 1,733 | 2,431 | ||||||||
Stockholders’ equity | 30,066 | 31,476 | ||||||||
Total Liabilities and Stockholders’ Equity | $ | 31,799 | $ | 33,907 | ||||||