Exhibit 99.1
Contact: Michael Dale, President/CEO
Jack Judd, Chief Financial Officer
763/553-7736
763/553-0052 Fax
Minneapolis MN, October 22, 2003
ATS MEDICAL ANNOUNCES 3RD QUARTER RESULTS
MINNEAPOLIS, October 22, 2003 -- Michael D. Dale, President and CEO of ATS
Medical, Inc. (NASDAQ: ATSI) announced today that ATS Medical recorded sales of
$4.6 million for the quarter ended September 30, 2003, compared to sales of $3.2
million for the quarter ended September 30, 2002, representing an increase of
46%. For the nine months ended September 30, 2003 sales totaled $12.9 million
compared to $9.6 million for the nine months ended September 30, 2002,
representing an increase of 34%. The net loss for the quarter ended September
30, 2003 totaled $307,000 or $0.01 per share compared to a net loss of $589,000
or $0.03 per share for the quarter ended September 30, 2002. Cash balances as of
September 2003 remain strong at $8.9 million, a slight decrease from June 2003
balances due to the approximately $440,000 of transaction related expenses
associated with the previously announced sale of 4.4 million shares of common
stock in a private placement to institutional investors. The proceeds from this
private placement were used to cancel the Centerpulse License Agreement and a
$2.6 million non-cash gain on the extinguishment of debt was recorded.
Commented Mr. Dale, "We are very pleased with third quarter results in all
markets, but especially so in North America. The cardiac surgery community, thus
far, has been very positive not only to our product, but to our people, and our
avowed mission to establish ATS Medical as a new leader within cardiovascular
surgery. Specific to North America, revenue increased 37% over second quarter of
2003, and 168% versus third quarter 2002. As of the end of September, we have
completed our primary hiring objectives for North America, and have now turned
our attention towards ongoing sales force training and development, and market
awareness activities focused towards the cardiac surgeon."
ATS Medical, Inc. manufactures and markets a pyrolytic carbon open pivot
mechanical heart valve. The Company's common stock is traded in the NASDAQ
National Market under the symbol "ATSI." The Company's website is
www.atsmedical.com.
This Press Release contains forward-looking statements that may include
statements regarding intent, belief or current expectations of the Company and
its management. Actual results could differ materially from those projected in
the forward looking statements as a result of a number of important factors,
including regulatory actions, competition, pricing pressures, supplier actions
and management of growth. For a discussion of these and other risks and
uncertainties that could affect the Company's activities and results, please
refer to the Company's filings with the Securities and Exchange Commission
including Exhibit 99.1 to its Form 10-Q for the quarter ended June 30, 2003.
ATS MEDICAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended Nine months ended
September 30, September 30,
--------------------------- ----------------------------
REVENUES 2003 2002 2003 2002
------------- ------------ ------------- -------------
Net sales $4,639,103 $3,184,351 $12,850,026 $9,561,856
Less cost of goods sold 3,255,380 2,179,420 9,251,830 7,194,342
------------ ----------- ------------ ------------
Gross profit 1,383,723 1,004,931 3,598,196 2,367,514
OPERATING EXPENSES
Research, development and engineering 384,453 345,790 1,212,763 1,940,140
Sales and marketing 2,808,501 389,432 6,349,923 2,691,637
General and administrative 1,090,804 634,882 3,121,148 2,089,450
Impairment of technology license 0 0 0 8,100,000
Reorganization expense 0 22,897 0 888,081
Extinguishment of debt (2,575,000) 0 (2,575,000) 0
------------ ----------- ------------ ------------
Total expenses 1,708,758 1,393,001 8,108,834 15,709,308
------------ ----------- ------------ ------------
Operating loss (325,035) (388,070) (4,510,638) (13,341,794)
------------ ----------- ------------ -------------
Net interest income (expense) 18,168 (201,136) (438,759) (98,496)
------------ ----------- ------------ ------------
NET LOSS FOR THE PERIOD ($306,867) ($589,206) ($4,949,397) ($13,440,290)
============ =========== ============ ============
NET LOSS PER SHARE:
Basic and diluted ($0.01) ($0.03) ($0.21) ($0.60)
============ =========== ============ ============
Weighted average number of shares outstanding:
Basic and diluted 24,743,314 22,270,880 23,137,865 22,245,458
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS (unaudited)
Cash, cash equivalents and short-term investments $8,896,821 $9,973,888
Accounts receivable 4,222,405 3,557,055
Inventories 16,929,115 15,876,324
Prepaid expenses 728,307 382,107
------------ -----------
Total current assets 30,776,648 29,789,374
Furniture, machinery & equipment, less accumulated depreciation 6,036,269 6,025,962
Other inventories 28,000,000 37,000,000
Technology License 18,500,000 18,500,000
Other assets 438,859 440,362
------------ -----------
TOTAL ASSETS $83,751,776 $91,755,698
============ ===========
Current liabilities $2,724,486 $8,114,455
Due to related party 289,355 434,033
Long-term debt 0 9,080,000
Shareholders' equity 80,737,935 74,127,210
------------ -----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $83,751,776 $91,755,698
============ ===========
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
Nine months ended September 30,
2003 2002
----------------- --------------
OPERATING ACTIVITIES
Net loss ($4,949,397) ($13,440,290)
Adjustments to reconcile net loss to net cash used in operating activites:
Depreciation 583,048 536,544
Loss on disposal of equipment 1,696 29,790
Compensation expense on stock options 5,196 0
Imputed interest long-term debt 320,000 239,000
Impairment of technology license 0 8,100,000
Extinguishment of debt (2,575,000) 0
Changes in operating assets and liabilities 6,577,515 1,025,677
------------ -----------
Net Cash used in operating activities (36,942) (3,509,279)
INVESTING ACTIVITIES
Purchase of short-term investments, net of sales (743,212) 6,199,814
Payments for technology license (12,000,000) 0
Net purchases of furniture, machinery and equipment (595,051) 67,321
------------ -----------
Net cash provided by (used in) investing activities (13,338,263) 6,267,135
FINANCING ACTIVITIES
Net proceeds from sale of common stock 11,554,690 108,644
------------ -----------
Net cash provided by financing activities 11,554,690 108,644
Effect of exchange rate changes on cash 236 0
------------ -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($1,820,279) $2,866,500
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