| | | |
| | | CONTACTS: |
| | | Patrick Spangler, CFO |
| | | ev3 Inc. |
| | | (763) 398-7000 |
| | | pspangler@ev3.net |
| | MEDIA RELATIONS: |
| | | Laura Nobles |
| | | Nobles Communications |
| | | (310) 795-0497 |
| | | laura@noblescommunications.com |
| | | |
| | | INVESTOR RELATIONS: |
| | | Marian Briggs |
| | | Padilla Speer Beardsley |
| | | (612) 455-1742 |
| | | mbriggs@psbpr.com |
ev3 Inc. Reports 29% Increase in Second Quarter Net Sales
Conference Call Scheduled for July 23, 2007 at 7:30 a.m. CT;
Simultaneous Webcast at www.ev3.net
PLYMOUTH, Minn. – July 22, 2007 –ev3 Inc. (NASDAQ: EVVV), a global endovascular device company, today reported financial results for its fiscal second quarter of 2007.
ev3’s net sales in the second quarter of 2007 increased 29% to $65.4 million versus net sales of $50.6 million in the second quarter of 2006. Second quarter sales growth was broad-based and reflected a strong contribution from each of ev3’s Cardio Peripheral and Neurovascular business segments, as well as a strong contribution from both domestic and international markets.
Jim Corbett, president and CEO of ev3 Inc., commented, “We are very pleased with our revenue performance this quarter which included consistent and balanced performance across all of our major product lines. We continued to demonstrate the leverage of our sales and marketing investment through increased productivity in our sales forces across business segments and around the world.”
ev3’s net loss for the second quarter of 2007 increased to $11.9 million compared to $10.8 million in the second quarter of 2006. ev3’s net loss per common share was $0.20 for the second quarter of 2007 compared to $0.19 per common share in the second quarter of 2006. Total weighted average common
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shares outstanding used in the per share calculations were 59.5 million and 56.7 million for the second quarter of 2007 and 2006, respectively.
ev3’s earnings before interest, taxes, depreciation and amortization (EBITDA), excluding charges for non-cash stock-based compensation, was a negative $3.5 million in the second quarter of 2007, compared to a negative $3.6 million in the second quarter of 2006. ev3 uses the non-GAAP financial measure, EBITDA, excluding charges for non-cash stock-based compensation, as a supplemental measure of performance and believes that this measure facilitates operating performance comparisons from period to period and company to company. A reconciliation of these non-GAAP numbers to ev3’s net loss for the respective periods can be found immediately following the detail of net sales by geography later in this press release. This information is also made available on the company’s website at www.ev3.net.
Commenting on earnings, Jim Corbett stated, “While we are very pleased with our revenue performance, progress towards our profitability goals this quarter was hampered by litigation expenses which were higher than anticipated. While we remain committed to achieving positive EBITDA, excluding charges for non-cash stock-based compensation, for 2007, the higher and ongoing level of litigation activity has made this goal more challenging.”
Sales Review
In the second quarter of 2007, ev3’s Neurovascular segment net sales increased 24% to $24.8 million versus $20.0 million in the second quarter of 2006. Within the Neurovascular business segment, sales of embolic products increased 36% to $12.8 million from $9.4 million, and sales of Neuro access and delivery products were up 12% to $12.0 million from $10.6 million. The primary growth drivers for the Neurovascular segment were the continued market penetration of both the Onyx Liquid Embolic System for the treatment of brain arterio-venous malformations (AVMs) and the Nexus family of embolic coils for the treatment of brain aneurysms.
Cardio Peripheral segment net sales in the second quarter of 2007 increased 33% to $40.6 million versus $30.6 million in the second quarter of 2006. Within the Cardio Peripheral business segment, stent sales increased 38% to $22.2 million from $16.0 million. Sales of thrombectomy and embolic protection products increased 50% to $8.4 million from $5.7 million, while sales of procedural support and other Cardio Peripheral products increased 13% to $10.0 million from $8.9 million. The largest contributors to the growth in the Cardio Peripheral segment were the EverFlex stent and the SpiderFX Embolic Protection Device, sales of which included initial shipments to the company’s new marketing partner, Volcano Corporation.
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On a geographic basis, ev3’s second quarter U.S. net sales increased 29% to $39.6 million, while second quarter international net sales increased 30% to $25.8 million, over the prior-year quarter. Changes in foreign currency exchange rates had a positive impact of approximately $1.1 million on second quarter 2007 net sales compared to the second quarter of the prior year.
Business Highlights
During the second quarter of 2007, ev3 achieved new milestones both domestically and internationally, including:
Neurovascular Segment Accomplishments
Axium: ev3 successfully completed initial clinical evaluations of its new Axium coil system in June. Based upon favorable response from first users, ev3 anticipates a full market roll out during the third quarter.
Onyx: ev3’s Onyx Liquid Embolic System achieved record net sales in second quarter. Onyx has become the standard of care for the treatment of arterio-venous malformations in many of the major teaching institutions in the United States.
Onyx 500: In April, ev3 received Humanitarian Device Exemption (HDE) approval from the FDA for its Onyx 500 Liquid Embolic System that is indicated for the treatment of intracranial aneurysms. Onyx 500 represents a new clinical tool for patients with challenging wide-necked cerebral aneurysms that are difficult to treat with conventional embolic coil technology. During the second quarter, initial cases were successfully completed and physician training began for ev3’s proctoring program. ev3 also initiated a clinical trial to further validate the benefits of Onyx 500 in treating wide-neck aneurysms.
SOLO: ev3 continued to make progress with its SOLO stent, the industry’s first such product that is fully retrievable. Given its unique design, ev3 envisions several potential applications for SOLO, including temporary placement across the neck of an aneurysm to facilitate packing with coils or a liquid embolic. ev3 continues to expect to launch SOLO in Europe later this year.
Cardio Peripheral Segment Accomplishments
This quarter saw the Cardio Peripheral segment achieve a number of significant clinical and commercial milestones. Perhaps most notable, was the conditional IDE (Investigational Device Exemption) approval from the FDA to study the use of ev3’s Protégé EverFlex Self-Expanding Stent System in the treatment of
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peripheral artery disease. The trial, called DURABILITY II, is designed to demonstrate the stent’s long-term patency and fracture resistance in symptomatic patients with PAD in the superficial femoral artery (SFA) as well as the proximal popliteal arteries in the leg. Importantly, this will be the first trial to examine the use of a single stent for treating lesions as long as 16 centimeters. ev3 expects the first patients to be enrolled in this trial during the third quarter.
Consistent with ev3’s overall strategy to drive science and clinical indications across the entire ev3 peripheral portfolio, ev3 is planning on a clinical trial with patients with PAG in the iliac artery to study use of its Protégé GPS, Protégé EverFlex and Primus products. ev3 expects to begin be enrolling patients in this trial in the fourth quarter.
Also during the second quarter, ev3 began enrolling patients in its CREATE carotid stenting post approval study. This study will examine the treatment of high risk patients with carotid artery disease utilizing ev3’s Protégé carotid stent and SpiderFX Embolic Protection Device. ev3 anticipates having 500 patients enrolled in the CREATE study by year end.
As previously announced, ev3 entered into a joint marketing and distribution agreement in April with Volcano Corporation, allowing Volcano to sell ev3’s SpiderFX Embolic Protection Device in conjunction with two of Volcano’s products for the endovascular treatment of diseased saphenous vein grafts. During the second quarter, ev3 commenced SpiderFX shipments to Volcano and completed the training of Volcano’s sales force.
International Accomplishments
ev3 opened up an office in Beijing, China during second quarter, with ten employees now on board. With one fifth of the world’s population, ev3 believes China represents an important growth market for its products.
Another significant market opportunity for ev3 is Korea. ev3’s Nexus product line has been extremely well received in Korea and the company received Korean regulatory approvals for Onyx on June 30, 2007.
Finally, in June ev3 completed the enrollment phase of its DURABILITY trial to evaluate the EverFlex stent for the treatment of SFA disease. This is one of several trials and registries being conducted in Europe this year. Follow up data collection is scheduled at six and twelve months.
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Proposed Merger Transaction
Also today, ev3 and Fox Hollow Technologies announced that the companies signed a definitive agreement by which ev3 and FoxHollow will merge in a $780 million cash and stock transaction. The proposed merger would create a new company with a market capitalization of approximately $1.7 billion, based on the companies’ closing stock prices on July 20, 2007. Under the terms of the merger agreement, FoxHollow stockholders will receive 1.45 shares of ev3 common stock plus $2.75 in cash for each share of FoxHollow common stock they own. FoxHollow stockholders may elect to receive either $25.92 in cash or 1.62 shares of ev3 common stock for each share of FoxHollow common stock by making an all-cash or an all-stock election, respectively, although such elections are subject to proration to preserve an overall mix of 1.45 share of ev3 common stock and $2.75 in cash for all of the outstanding shares of FoxHollow common stock in the aggregate. The transaction is expected to be completed in the fourth quarter of 2007.
Outlook
ev3 expects 2007 annual net sales to be in the range of approximately $266 to $274 million. ev3 expects third quarter of 2007 net sales to be in the range of $64 to $68 million. Further, ev3 continues to expect its EBITDA, excluding non-cash stock-based compensation, to be positive in 2007, excluding all expenses relating to the proposed merger.
Conference Call Information
ev3 will host a conference call tomorrow, July 23, 2007, beginning at 7:30 a.m. CT to discuss its announced merger transaction with FoxHollow Technologies Inc. and provide a brief overview of ev3’s financial results for the second quarter of 2007. Discussions during the conference call may include forward-looking statements regarding such topics as, an but not limited to, the company’s net sales, cost of goods sold, operating expenses, distribution arrangements, clinical studies, regulatory status, financial position and comments the company may make about its future in response to questions from participants on the conference call. Any interested party may listen to the conference call through a live audio Webcast at www.ev3.net. For those unable to listen to the Webcast, a playback of the Webcast will be available at www.ev3.net for approximately 14 days. Those without Internet access may join the call from within the United States by dialing 888-823-7459; outside the United States dial 973-935-8751 passcode 9041797. A playback of the conference call will be available from 11 a.m. CT, July 23, 2007 until 11:00 p.m. CT on August 6, 2007 by dialing 877-519-4471 (United States) or 973-341-3080 (International), passcode 9041797.
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About ev3 Inc.
ev3 Inc. is a global medical device company focused on endovascular technologies for the minimally invasive treatment of vascular diseases and disorders.
ev3 and the ev3 logo are trademarks of ev3 Inc., registered in the U.S. and other countries.
All trademarks and trade names referred to in this press release are the property of their respective owners.
Forward-Looking Statements
Statements contained in this press release that are not historical information are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Such potential risks and uncertainties include, but are not limited to, in no particular order: product demand and market acceptance; the impact of competitive products and pricing; delays in regulatory approvals and the introduction of new products; and success of clinical testing. More detailed information on these and additional factors which could affect ev3 Inc.’s operating and financial results is described in the company’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly report onForm 10-Q. ev3 Inc. urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the company faces. Additionally, ev3 Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
Important Additional Information for Investors and Stockholders
This communication is being made in respect of the proposed business combination involving ev3 and FoxHollow. In connection with the proposed transaction, ev3 intends to file with the SEC a registration statement on Form S-4, containing an information/proxy statement-prospectus and other relevant materials and each of ev3 and FoxHollow plan to file with the SEC other documents regarding the proposed transaction. The final information/proxy statement-prospectus will be mailed to the stockholders of ev3 and FoxHollow.INVESTORS AND SECURITY HOLDERS OF EV3 AND FOXHOLLOW ARE URGED TO READ THE INFORMATION/PROXY STATEMENT-PROSPECTUS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS) AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT EV3, FOXHOLLOW AND THE PROPOSED TRANSACTION.
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Investors and security holders will be able to obtain free copies of the registration statement and the information/proxy statement-prospectus (when available) and other documents filed with the SEC by ev3 and FoxHollow at the SEC’s web site at www.sec.gov. Free copies of the registration statement and the information/proxy statement-prospectus (when available) and other documents filed with the SEC can also be obtained by directing a request to ev3, Attention: Investor Relations Dept., telephone: (763) 398-7000; or at ir@ev3.net or to FoxHollow, Attention: Investor Relations Dept., telephone (650) 421-8449, or at investorrelations@foxhollowtech.com. In addition, investors and security holders may access copies of the documents filed with the SEC by ev3 on ev3’s website at www.ev3.net, and investors and security holders may access copies of the documents filed with the SEC by FoxHollow on FoxHollow’s website at www.foxhollowtech.com.
ev3, FoxHollow and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from the stockholders of FoxHollow in respect of the proposed transaction. Information regarding ev3’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 14, 2007 and the proxy statement for ev3’s 2007 Annual Meeting of Stockholders, filed with the SEC on April 16, 2007. Information regarding FoxHollow’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 13, 2007 and the proxy statement for FoxHollow’s 2007 Annual Meeting of Stockholders, filed with the SEC on April 30, 2007. If and to the extent that any of the ev3 or FoxHollow participants will receive any additional benefits in connection with the merger that are unknown as of the date of this filing, the details of those benefits will be described in the definitive information/proxy statement-prospectus relating to the merger. Investors and stockholders can obtain more detailed information regarding the direct and indirect interests of ev3’s and FoxHollow’s directors and executive officers in the merger by reading the definitive information/proxy statement-prospectus when it becomes available.
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ev3 Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | July 1, | | | July 2, | | | July 1, | | | July 2, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Net sales | | $ | 65,396 | | | $ | 50,620 | | | $ | 126,895 | | | $ | 92,857 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | |
| Cost of goods sold (a) | | | 22,362 | | | | 18,179 | | | | 42,819 | | | | 34,667 | |
| Sales, general and administrative (a) | | | 40,882 | | | | 35,808 | | | | 80,019 | | | | 73,669 | |
| Research and development (a) | | | 11,323 | | | | 6,047 | | | | 18,756 | | | | 12,821 | |
| Amortization of intangible assets | | | 3,864 | | | | 4,282 | | | | 7,964 | | | | 8,525 | |
| (Gain) loss on sale or disposal of assets, net | | | (1,004 | ) | | | (46 | ) | | | (988 | ) | | | 124 | |
| Acquired in-process research and development | | | — | | | | — | | | | — | | | | 1,786 | |
| | | | | | | | | | | | | |
| Total operating expenses | | | 77,427 | | | | 64,270 | | | | 148,570 | | | | 131,592 | |
| | | | | | | | | | | | | | | | | |
| Loss from operations | | | (12,031 | ) | | | (13,650 | ) | | | (21,675 | ) | | | (38,735 | ) |
| | | | | | | | | | | | | | | | | |
| Other income: | | | | | | | | | | | | | | | | |
| Gain on sale of investments, net | | | — | | | | (1,063 | ) | | | — | | | | (1,063 | ) |
| Interest income, net | | | (297 | ) | | | (514 | ) | | | (406 | ) | | | (1,213 | ) |
| Other income, net | | | (195 | ) | | | (1,327 | ) | | | (512 | ) | | | (1,381 | ) |
| | | | | | | | | | | | | |
| Loss before income taxes | | | (11,539 | ) | | | (10,746 | ) | | | (20,757 | ) | | | (35,078 | ) |
| | | | | | | | | | | | | | | | | |
| Income tax expense | | | 332 | | | | 77 | | | | 608 | | | | 246 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (11,871 | ) | | $ | (10,823 | ) | | $ | (21,365 | ) | | $ | (35,324 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | | | | |
| Net loss per common share (basic and diluted) | | $ | (0.20 | ) | | $ | (0.19 | ) | | $ | (0.37 | ) | | $ | (0.63 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | 59,543,827 | | | | 56,698,043 | | | | 58,529,041 | | | | 56,319,427 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| (a) Includes stock-based compensation charges of: | | | | | | | | | | | | | | | | |
| Cost of goods sold | | $ | 187 | | | $ | 155 | | | $ | 345 | | | $ | 369 | |
| Sales, general and administrative | | | 2,207 | | | | 1,799 | | | | 4,066 | | | | 3,165 | |
| Research and development | | | 266 | | | | 158 | | | | 448 | | | | 372 | |
| | | | | | | | | | | | | |
| | | $ | 2,660 | | | $ | 2,112 | | | $ | 4,859 | | | $ | 3,906 | |
| | | | | | | | | | | | | |
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ev3 Inc.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
| | | | | | | | | |
| | | July 1, | | | December 31, | |
| | | 2007 | | | 2006 | |
| | | (unaudited) | | | | |
Assets | | | | | | | | |
Current assets | | | | | | | | |
| Cash and cash equivalents | | $ | 57,919 | | | $ | 24,053 | |
| Short-term investments | | | 7,800 | | | | 14,700 | |
| Accounts receivable, less allowance of $3,877 and $3,924, respectively | | | 56,046 | | | | 45,137 | |
| Inventories | | | 44,297 | | | | 42,124 | |
| Prepaid expenses and other assets | | | 4,913 | | | | 7,162 | |
| Other receivables | | | 2,446 | | | | 2,669 | |
| | | | | | | |
Total current assets | | | 173,421 | | | | 135,845 | |
| | | | | | | | | |
| Restricted cash | | | 1,310 | | | | 2,022 | |
| Property and equipment, net | | | 23,960 | | | | 24,072 | |
| Goodwill | | | 149,061 | | | | 149,061 | |
| Other intangible assets, net | | | 41,650 | | | | 40,014 | |
| Other assets | | | 730 | | | | 1,812 | |
| | | | | | | |
Total assets | | $ | 390,132 | | | $ | 352,826 | |
| | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | |
Current liabilities | | | | | | | | |
| Accounts payable | | $ | 10,782 | | | $ | 13,140 | |
| Accrued compensation and benefits | | | 15,676 | | | | 16,382 | |
| Accrued liabilities | | | 14,745 | | | | 10,102 | |
| Current portion of long-term debt | | | 3,346 | | | | 2,143 | |
| | | | | | | |
Total current liabilities | | | 44,549 | | | | 41,767 | |
| | | | | | | | | |
| Long-term debt | | | 8,095 | | | | 5,357 | |
| Other long-term liabilities | | | 902 | | | | 468 | |
| | | | | | | |
Total liabilities | | | 53,546 | | | | 47,592 | |
| | | | | | | | | |
Stockholders’ equity | | | | | | | | |
| | | | | | | | | |
| Common stock: $0.01 par value; 100,000,000 shares authorized; issued and outstanding: 60,889,666 and 57,594,742, respectively | | | 609 | | | | 576 | |
| Additional paid in capital | | | 972,743 | | | | 919,221 | |
| Accumulated deficit | | | (636,660 | ) | | | (614,578 | ) |
| Accumulated other comprehensive (loss) income | | | (106 | ) | | | 15 | |
| | | | | | | |
Total stockholders’ equity | | | 336,586 | | | | 305,234 | |
| | | | | | | |
Total liabilities and stockholders’ equity | | $ | 390,132 | | | $ | 352,826 | |
| | | | | | | |
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ev3 Inc.
SELECTED NET SALES INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | | | | | For the Six Months Ended | | | | |
| | | July 1, | | | July 2, | | | | | | | July 1, | | | July 2, | | | | |
| | | 2007 | | | 2006 | | | % change | | | 2007 | | | 2006 | | | % change | |
NET SALES BY SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
| Cardio Peripheral | | | | | | | | | | | | | | | | | | | | | | | | |
| Stents | | $ | 22,153 | | | $ | 16,020 | | | | 38 | % | | $ | 41,959 | | | $ | 29,066 | | | | 44 | % |
| Thrombectomy and embolic protection | | | 8,443 | | | | 5,642 | | | | 50 | % | | | 14,661 | | | | 9,679 | | | | 51 | % |
| Procedural support and other | | | 10,035 | | | | 8,919 | | | | 13 | % | | | 20,502 | | | | 17,168 | | | | 19 | % |
| | | | | | | | | | | | | | | | | | | |
| Total cardio peripheral | | | 40,631 | | | | 30,581 | | | | 33 | % | | | 77,122 | | | | 55,913 | | | | 38 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Neurovascular | | | | | | | | | | | | | | | | | | | | | | | | |
| Embolic products | | | 12,827 | | | | 9,412 | | | | 36 | % | | | 25,753 | | | | 16,795 | | | | 53 | % |
| Neuro access and delivery products and other | | | 11,938 | | | | 10,627 | | | | 12 | % | | | 24,020 | | | | 20,149 | | | | 19 | % |
| | | | | | | | | | | | | | | | | | | |
| Total neurovascular | | | 24,765 | | | | 20,039 | | | | 24 | % | | | 49,773 | | | | 36,944 | | | | 35 | % |
| | | | | | | | | | | | | | | | | | | |
Total company | | $ | 65,396 | | | $ | 50,620 | | | | 29 | % | | $ | 126,895 | | | $ | 92,857 | | | | 37 | % |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | | | | | For the Six Months Ended | | | | |
| | | July 1, | | | July 2, | | | | | | | July 1, | | | July 2, | | | | |
| | | 2007 | | | 2006 | | | % change | | | 2007 | | | 2006 | | | % change | |
NET SALES BY GEOGRAPHY | | | | | | | | | | | | | | | | | | | | | | | | |
| United States | | $ | 39,576 | | | $ | 30,689 | | | | 29 | % | | $ | 74,716 | | | $ | 55,463 | | | | 35 | % |
| International | | | 25,820 | | | | 19,931 | | | | 30 | % | | | 52,179 | | | | 37,394 | | | | 40 | % |
| | | | | | | | | | | | | | | | | | | |
Total net sales | | $ | 65,396 | | | $ | 50,620 | | | | 29 | % | | $ | 126,895 | | | $ | 92,857 | | | | 37 | % |
| | | | | | | | | | | | | | | | | | | |
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ev3 Inc.
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | July 1, | | | July 2, | | | July 1, | | | July 2, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
Reconciliation of net loss to EBITDA | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net loss, as reported (GAAP basis) | | $ | (11,871 | ) | | $ | (10,823 | ) | | $ | (21,365 | ) | | $ | (35,324 | ) |
| | | | | | | | | | | | | | | | | |
| Interest income, net | | | (297 | ) | | | (514 | ) | | | (406 | ) | | | (1,213 | ) |
| Income tax expense | | | 332 | | | | 77 | | | | 608 | | | | 246 | |
| Depreciation and amortization | | | 5,670 | | | | 5,581 | | | | 11,574 | | | | 11,097 | |
| | | | | | | | | | | | | |
EBITDA | | $ | (6,166 | ) | | $ | (5,679 | ) | | $ | (9,589 | ) | | $ | (25,194 | ) |
| | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | 2,660 | | | | 2,112 | | | | 4,859 | | | | 3,906 | |
| | | | | | | | | | | | | |
EBITDA, adjusted for stock-based compensation | | $ | (3,506 | ) | | $ | (3,567 | ) | | $ | (4,730 | ) | | $ | (21,288 | ) |
| | | | | | | | | | | | | |
ev3 uses non-GAAP financial measures, as outlined above, as supplemental measures of performance and believes these measures facilitate operating performance comparisons from period to period and company to company by factoring out potential differences caused by variations in capital structure, tax positions, depreciation, non-cash charges and certain large and unpredictable charges. ev3 also believes that the presentation of these measures provides useful information to investors in evaluating the company’s operations, period over period. Non-GAAP measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the company’s results as reported under Generally Accepted Accounting Principles (GAAP). This information is also made available on the company’s website at www.ev3.net.
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