Baxano Surgical 8-K TranS1 Inc. Reports Operating Results for the First Quarter of 2009

Exhibit 99.1

TranS1 Inc. Reports Operating Results for the First Quarter of 2009

Highlights:

First quarter revenues increased 45% to $8.7 million

889 TranS1 procedures performed globally in the quarter

Gross margin was 82.2% for the quarter

GAAP loss per share was $0.25 for the quarter

Non-GAAP loss per share was $0.22 for the quarter

WILMINGTON, NC — (PRIME NEWSWIRE)—April 27, 2009—TranS1 Inc. (NASDAQ:TSON), a medical device company focused on designing, developing and marketing products that implement its proprietary minimally invasive surgical approach to treat degenerative disc disease and instability affecting the lower lumbar region of the spine, today announced its financial results for the first quarter ended March 31, 2009.

Revenues were $8.7 million in the first quarter of 2009, representing a 45% increase over revenues of $6.0 million in the first quarter of 2008. Gross margin was 82.2% in the first quarter, slightly below the first quarter of 2008.

Operating expenses were $12.5 million in the first quarter of 2009 compared to $8.3 million in the first quarter of 2008. The increase in operating expenses is primarily attributable to an increase in sales and marketing costs as a result of the continued expansion of the direct sales force, increased commissions as a result of increased sales and increased surgeon training costs.

Net loss was $5.2 million and $2.4 million for the quarters ended March 31, 2009 and 2008, respectively. GAAP net loss per common share was $0.25 in the first quarter of 2009 compared to a net loss per share of $0.12 in the first quarter of 2008.

For the quarter ended March 31, 2009, on a non-GAAP basis, adjusting for non-cash stock compensation expense, net loss was $0.22 per common share based upon 20,552,000 weighted average common shares outstanding. For the quarter ended March 31, 2008, on a non-GAAP basis, adjusting for non-cash stock compensation expense, net loss was $0.10 per common share based upon 19,930,000 weighted average common shares outstanding.

Cash, cash-equivalents and investments were $72.1 million as of March 31, 2009.

“I was pleased with our strong results in the first quarter,” said Rick Randall, President and Chief Executive Officer of TranS1. “The continuing maturation of our direct sales force, combined with the impact of unique events like the regional Association of Pre-Sacral Spine Surgeon programs that we sponsor, positively impacted our selling efforts. Additionally, we continue to be pleased with the adoption and clinical results of our two-level procedure.”

Conference Call

TranS1 will host a conference call today at 4:30 pm ET to discuss its first quarter financial results. To listen to the conference call on your telephone, please dial 877-723-9518 for domestic callers and 719-325-4837 for international callers approximately ten minutes prior to the start time. The call will be concurrently webcast. To access the live audio broadcast or the subsequent archived recording, visit the TranS1 website at www.trans1.com under the investor relations section.

Non-GAAP Measures

Management uses certain non-GAAP financial measures such as non-GAAP net loss and net loss per share, which exclude stock based compensation. This non-GAAP presentation is given in part to enhance the understanding of the company’s historical financial performance and comparability between periods. The company believes that the non-GAAP presentation to exclude stock-based compensation is relevant and useful information that will be widely used by investors and analysts. Accordingly, the company is disclosing this information to permit additional analysis of the company’s performance. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP. A reconciliation of the GAAP financial measures to the comparable non-GAAP financial measure is included below.

About TranS1 Inc.

TranS1 is a medical device company focused on designing, developing and marketing products that implement its proprietary minimally invasive surgical approach to treat degenerative disc disease and instability affecting the lower lumbar region of the spine. TranS1 currently markets two single-level fusion products, the AxiaLIF^® and the AxiaLIF 360º™, and a two-level fusion product, the AxiaLIF 2L™, in the US and Europe. TranS1 was founded in May 2000 and is headquartered in Wilmington, North Carolina. For more information, visit www.trans1.com.

Forward-Looking Statements

This press release includes forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. These risks and uncertainties include, among other things, risks associated with the adoption of a new technology by spine surgeons, product development efforts, regulatory requirements, maintenance and prosecution of adequate intellectual property protection and other economic and competitive factors. These forward looking statements are based on the company’s expectations as of the date of this press release and the company undertakes no obligation to update information provided in this press release. For a discussion of risks and uncertainties associated with TranS1’s business, please review the company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2008.

CONTACT:
Investors:
TranS1 Inc.
Michael Luetkemeyer, 910-332-1700
Chief Financial Officer

or

Westwicke Partners
Mark Klausner, 443-213-0501
mark.klausner@westwicke.com

Source: TranS1 Inc.

TranS1 Inc.
Statements of Operations
(in thousands, except per share amounts)
(Unaudited)

	Three Months
	Ended March 31,
	2009			2008
Revenue	$	8,678		$	5,978
Cost of revenue		1,542			1,038
Gross profit		7,136			4,940
Operating expenses:
Research and development		1,605			1,215
Sales and marketing		9,150			5,697
General and administrative		1,762			1,407
Total operating expenses		12,517			8,319
Operating loss		(5,381	)		(3,379	)
Interest income		217			940
Net loss	$	(5,164	)	$	(2,439	)
Net loss per common share — basic and diluted	$	(0.25	)	$	(0.12	)
Weighted average common shares outstanding — basic and diluted		20,552			19,930
Stock-based compensation is included in operating expenses in the following categories:
Cost of revenue	$	18		$	14
Research and development		44			91
Sales and marketing		388			275
General and administrative		193			143
	$	643		$	523

Reconciliation of Quarterly Results
(in thousands, except per share amounts)
(Unaudited)

	2009			2008
GAAP net loss	$	(5,164	)	$	(2,439	)
Stock based compensation		643			523
Non-GAAP net loss	$	(4,521	)	$	(1,916	)
Shares used in computing GAAP and non-GAAP loss per share		20,552			19,930
Non-GAAP loss per share	$	(0.22	)	$	(0.10	)

TranS1 Inc.
Balance Sheets
(in thousands)
(Unaudited)

	March 31,			Dec. 31,
	2009			2008
Assets
Current assets:
Cash and cash equivalents	$	52,786		$	42,051
Short-term investments		19,269			35,215
Accounts receivable, net		5,447			4,812
Inventory		6,525			6,369
Prepaid expenses and other assets		602			632
Total current assets		84,629			89,079
Property and equipment, net		1,460			1,412
Total assets	$	86,089		$	90,491
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,944		$	2,896
Accrued expenses		2,059			2,009
Total current liabilities		5,003			4,905
Stockholders’ equity
Common stock		2			2
Additional paid-in capital		134,171			133,507
Accumulated deficit	$	(53,087	)	$	(47,923	)
Total stockholders’ equity		81,086			85,586
Total liabilities and stockholders’ equity	$	86,089		$	90,491

TranS1 Inc.
Statements of Cash Flows
(in thousands)
(Unaudited)

	Three Months
	Ended March 31,
	2009			2008
Cash flows from operating activities:
Net loss	$	(5,164	)	$	(2,439	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		229			170
Stock-based compensation		643			523
Allowance for excess and obsolete inventory		35			(1	)
Provision for bad debts		24			18
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(659	)		(317	)
(Increase) decrease in inventory		(191	)		377
(Increase) decrease in prepaid expenses		30			(31	)
Increase (decrease) in accounts payable		48			115
Increase (decrease) in accrued expenses		50			(387	)
Net cash used in operating activities		(4,955	)		(1,972	)
Cash flows from investing activities:
Purchase of property and equipment		(277	)		(420	)
Purchases of investments		(2,973	)		(33,150	)
Sales and maturities of short-term investments		18,919			9,825
Net cash provided by (used in) investing activities		15,669			(23,745	)
Cash flows from financing activities:
Proceeds from issuance of common stock		21			44
Net cash provided by (used in) financing activities		21			44
Net increase (decrease) in cash and cash equivalents		10,735			(25,673	)
Cash and cash equivalents, beginning of period		42,051			64,676
Cash and cash equivalents, end of period	$	52,786		$	39,003