NEWS RELEASE PLC
MEDICAL
SYSTEMS, INC.
FOR IMMEDIATE RELEASE
CONTACT: MICHELE FASANO
DIRECTOR OF CORPORATE COMMUNICATIONS
800-211-7327
PLC SYSTEMS REPORTS FOURTH QUARTER
AND YEAR END FINANCIAL RESULTS
- COMPANY SHIPS 31 HEART LASERS IN 1996, UP 35% OVER LAST YEAR -
- THE FDA FILES THE PMA APPLICATIONS FOR THE HEART LASERTM -
FRANKLIN, MA, FEBRUARY 27, 1997 -- PLC SYSTEMS INC. (AMEX SYMBOL: PLC) today
announced financial results for the fourth quarter and year ended December 31,
1996.
Total revenues for the fourth quarter ended December 31, 1996 were $3,120,000 as
compared to revenues of $7,399,000 for the corresponding quarter in 1995. The
net loss for the fourth quarter ended December 31, 1996 was $1,351,000, or $0.08
per share, compared to net income of $3,208,000 or $0.19 per share for the
fourth quarter of 1995.
Total revenues for the year ended December 31, 1996 were $11,872,000, compared
to revenues of $13,345,000 for the year ended December 31, 1995. The net loss
for the year ended December 31, 1996 was $1,540,000, or $0.09 per share,
compared to net income of $2,004,000, or $0.12 per share for the year ended
December 31, 1995.
The Company shipped a record 13 Heart Lasers in the fourth quarter ended
December 31, 1996. Of these shipments, nine were placements and four were sales.
For the full year 1996 the Company shipped 31 Heart Lasers, of which 17 were
placements and 13 were sales (one Heart Laser was shipped for research testing
only). This compares to 23 Heart Laser shipments for the full year 1995, of
which nine were placements and 14 were sales.
"We are pleased to report that the Company reached its goal of shipping 30 Heart
Lasers in 1996," stated M. Lee Hibbs, President and CEO of PLC Systems Inc. "The
13 Heart Laser shipments in the fourth quarter of 1996 is a record best for PLC
Systems. The majority of Heart Laser shipments were placement contracts, and we
believe this will benefit the Company over time. In fact, the placement/service
fees in 1996 doubled the fees collected in the prior year." Mr. Hibbs continued,
"More importantly, the Food and Drug Administration has notified the Company
that its PMA application for The Heart LaserTM has been officially filed at the
Agency.
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PLC Systems Inc.
Fourth Quarter/Year End Earnings
Page 2
We are very excited about the filing of the Company's PMA by the FDA. It is an
important step toward full approval and is necessary before an advisory panel
meeting can be scheduled. TMR has been granted expedited review by the FDA and
therefore, The Heart Laser PMA application is given priority in review at the
Agency. We have high hopes that the PMA application will progress rapidly
through the final stages of approval."
PLC Systems has implemented both a placement strategy and a direct/distributor
sales strategy for Heart Laser purchases. The placement program allows the
Company to receive recurring revenues based on usage of The Heart Laser rather
than one-time revenues for the sale of each Heart Laser. Under the placement
model, an installation fee of up to $25,000 is recorded when The Heart Laser TMR
system is installed and the Company then receives a fee per contractual
agreements.
Commenting on the Company's financial results, Patricia Murphy, Chief Financial
Officer of PLC Systems Inc., stated, "Nineteen ninety-six is the first year in
the Company's history in which the number of Heart Lasers shipped under the
placement model exceeded the number of lasers sold. In 1996, 17 Heart Lasers
were shipped under the placement model (nine in the fourth quarter) and 13
lasers were shipped as sales. In the prior year, the Company shipped 23 Heart
Lasers but the majority of those shipments were sales. Included in the 1995
sales were six fourth quarter shipments to the Company's exclusive distributor
in Japan, a contract valued at over $5 million. PLC Systems is pleased to have
achieved roughly the same revenue as last year without any similar agreements.
In addition, the Company made the transition to a higher level of placement
contracts versus sales. PLC Systems will continue to emphasize shipments under
the placement contract as we believe this will benefit the Company long term by
providing more revenue over an extended period of time."
Ms. Murphy continued, "As we move forward in the FDA review process, PLC Systems
has begun to prepare for the expected launch of The Heart Laser. Selling,
general and administrative expenses increased significantly over last year as
the Company established three new international subsidiaries in the fourth
quarter and increased its sales, marketing and clinical service presence both
domestically and abroad. Additionally, PLC moved to a new 37,000 square foot
facility, increased staffing in all departments and expanded its presence at the
various medical/scientific meetings." She continued, "Research and development
costs increased as PLC Systems began the development of a second generation
Heart Laser and its fiber based percutaneous TMR program. We have also
undertaken additional clinical studies (i.e., TMR in combination with cardiac
bypass surgery). These new projects are important in building upon the potential
markets for TMR. Management estimates the initial U.S. market for TMR using The
Heart Laser to be approximately 150,000 patients and growing. Yet, we believe
the greatest market potential for TMR with The Heart Laser is as an adjunct
therapy to the approximate 675,000 bypass surgeries performed each year
worldwide."
Updating investors on the progress of TMR using the Company's CO2 Heart Laser,
M. Lee Hibbs, President and CEO of PLC Systems Inc. stated, "To date, nearly
3,000 patients in 29 countries have received treatment with The Heart Laser. In
1996, we succeeded in doubling the number of patients treated as well as the
number of countries in which TMR is available. TMR using the Company's
proprietary CO2 Heart Laser is on the agenda of nearly every major medical
meeting worldwide and
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PLC Systems Inc.
Fourth Quarter/Year End Earnings
Page 3
the U.S. clinical results continue to be outstanding. The annual U.S. TMR
Symposia will be sponsored this year by the Washington Heart Institute and is
scheduled for May 1997. In addition, new data will be presented at both the
American College of Cardiology and the American Association of Thoracic
Surgeons. Nineteen ninety-seven promises to be a very exciting year for PLC
Systems. We plan to introduce, for the first time, TMR using The Heart Laser
into several countries and expect to exceed the 31 shipments made in 1996."
PLC SYSTEMS INC. is a cardiac revascularization company developing medical
systems and technology with the potential to provide patients suffering from
coronary artery disease a third alternative to angioplasty and cardiac bypass
surgery. PLC Medical Systems, Inc., a wholly owned subsidiary of PLC Systems
Inc., has developed The Heart Laser which uses patented technology for a new
cardiosurgical procedure known as transmyocardial revascularization (TMR). The
Company has been granted expedited review of its premarket approval (PMA)
application for TMR using the 1000 watt CO2 Heart Laser to treat cardiac
patients with medically refractory angina who are not candidates for angioplasty
or bypass surgery.
Note: Certain of the above statements may be forward-looking statements that
involve risks and uncertainties. In such instances, actual results could differ
materially as a result of a variety of factors including competitive
developments, no guarantee of FDA approval and other risk factors listed from
time to time in the Company's SEC reports.
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PLC Systems Inc.
Fourth Quarter/Year End Earnings
Page 4
PLC SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
Revenues:
Product Sales............................ $2,314 $6,886 $9,082 $11,938
Placements/Service....................... 806 513 2,790 1,407
------ ------ ------- -------
Total Revenues......................... 3,120 7,399 11,872 13,345
Cost of Revenues:
Product.................................. 976 1,703 2,911 4,177
Placements/Service....................... 416 192 1,155 386
------- ------- ------- -------
Total Cost of Revenues................. 1,392 1,895 4,066 4,563
Gross profit .............................. 1,728 5,504 7,806 8,782
Operating expenses:
Selling, general and administrative...... 2,426 1,794 7,023 5,035
Research costs........................... 791 530 2,835 2,246
------ ------- -------- -------
Total operating expenses............... 3,217 2,324 9,858 7,281
Income/(loss) from operations.............. (1,489) 3,180 (2,052) 1,501
Other Income............................... 134 113 512 588
--------- ------ -------- -------
Income/(loss) before taxes................. (1,355) 3,293 (1,540) 2,089
Provision for income taxes................. (4) 85 0 85
----------- ------- --------- -------
Net income/(loss).......................... ($1,351) $3,208 ($1,540) $2,004
======== ======= ======== ========
Net income/(loss) per share................ ($0.08) $0.19 ($0.09) $0.12
Shares used to compute
net income/(loss) per share............. 16,511,000 17,114,000 16,376,000 16,590,000
BALANCE SHEET HIGHLIGHTS
December 31, December 31,
1996 1995
---- ----
Cash and short term investments...................... $8,509 $7,204
Total current assets................................. 14,168 16,230
Total Assets......................................... 19,417 18,290
Total current liabilities............................ 2,923 2,689
Stockholders' equity................................. 16,467 15,508
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