Exhibit 99.1
Contact: Michael Dale, President/CEO
Jack Judd, Chief Financial Officer
Manny Villafana, Chairman
763/553-7736
763/553-0052 Fax
EVC Group, Inc.
Doug Sherk, Jennifer Beugelmans
415/896-6820
Anne Bugge
206/926-5220
FOR IMMEDIATE RELEASE
ATS MEDICAL REVENUE INCREASES 39% IN 2003
FOURTH QUARTER REVENUE GROWS 50%
CONFERENCE CALL SCHEDULED FOR TODAY AT 3 PM EST
MINNEAPOLIS, February 11, 2004 -- ATS Medical, Inc. (NASDAQ: ATSI) a leader in
mechanical heart valve technology and related cardiac surgical accessories,
today reported that revenue for the fourth quarter of 2003 increased more than
50 percent to a record $5.6 million, as compared with sales of $3.7 million for
the fourth quarter of 2002. For the twelve months ended December 31, 2003, sales
grew to a record $18.5 million compared with $13.3 million for the twelve months
of 2002, an increase of 39 percent.
Net loss for the fourth quarter of 2003 was $8.3 million compared with $4.8
million for the fourth quarter of 2002. Included in the net loss amounts in the
fourth quarters of 2003 and 2002 are $4.4 million and $2.0 million,
respectively, for a lower of cost or market inventory adjustment. For the twelve
months ended December 31, 2003, net loss was $13.3 million compared with $18.2
million for the twelve months of 2002. Net cash used in operations was $0.5
million during 2003 compared with $2.9 million in 2002. Cash and investments
were $8.5 million at December 31, 2003.
Michael D. Dale, President and CEO of ATS Medical commented, "The fourth quarter
of 2003 represents our sixth consecutive quarter of sales growth. Our results
provide continued evidence of the cardiovascular surgery community's growing
acceptance of the ATS Open Pivot(R) heart valve as a new `Standard of Care' for
mechanical heart valve replacement. Sales in the United States grew to $1.8
million during the quarter and $5.1 million for the year. International sales
grew to $3.9 million during the quarter and $13.3 million for the year."
"During 2003, we took several steps to improve our future growth and
profitability." Mr. Dale continued, "Most importantly, we established a global
sales and marketing team comprised of some of the most experienced and
successful cardiovascular surgery professionals in the industry. These people
are perhaps the best example of our capacity and commitment to fulfill our
mission to become a leader within cardiovascular surgery. We also strengthened
our balance sheet by eliminating $28 million in long-term debt and commitments
related to our carbon technology license, and significantly reduced our
high-cost inventories paid for in prior years. Looking forward, we feel
confident that ATS will be able to grow 2004 total revenue by at least 30%
versus 2003. Regarding cash requirements, we believe current cash balances are
adequate to fund current operations throughout 2004," concluded Mr. Dale.
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CONFERENCE CALL TODAY
ATS management will host a conference call and webcast today at 3:00 p.m. EST to
discuss its fourth quarter and full year financial results, outlook for 2004 and
current corporate developments. The dial in number for the conference call is
800-218-4007 for domestic participants and 303-262-2143 for international
participants.
A taped replay of the conference call will also be available beginning
approximately one hour after the call's conclusion and will remain available
through 9:00 p.m. EST on Wednesday, February 18, 2004 and can be accessed by
dialing 800-405-2236 for domestic callers and 303-590-3000 for international
callers, using the passcode 567787#. A live webcast of the call can be accessed
at www.atsmedical.com by clicking on the home page icon. The webcast will also
be archived on the company's website.
ABOUT ATS MEDICAL
ATS Medical, Inc., headquartered in Minneapolis, is a leading medical device
company specializing in mechanical heart valves, aortic graft prostheses and
related cardiovascular surgery accessories. ATS is a global company with product
sales in more than 40 countries. The ATS Open Pivot(R) Valve has been implanted
in over 80,000 patients and utilizes a unique pivot design that results in
better performance and a lower risk profile. The Company's website is
www.atsmedical.com.
SAFE HARBOR
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 to
its Form 10-Q for the quarter ended September 30, 2003.
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ATS MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended Year ended
December 31, December 31,
------------------------------- -----------------------------------
2003 2002 2003 2002
-------------- ------------- ---------------- ---------------
Net sales $5,634 $3,739 $18,484 $13,301
Cost of goods sold 8,381 5,112 17,632 12,307
-------------- ------------- ---------------- ---------------
Gross profit (2,747) (1,373) 852 994
Operating expenses:
Sales and marketing 3,829 621 10,180 3,312
Research and development 552 485 1,764 2,425
General and administrative 1,229 1,024 4,350 3,114
Impairment of technology license 0 0 0 8,100
Distributor termination 0 242 0 1,130
Reorganization expense 0 821 0 821
Extinguishment of debt 0 0 (2,575) 0
-------------- ------------- ---------------- ---------------
Total operating expenses 5,610 3,193 13,719 18,902
-------------- ------------- ---------------- ---------------
Operating loss (8,357) (4,566) (12,867) (17,908)
-------------- ------------- ---------------- ---------------
Interest (expense) income 14 (206) (425) (304)
-------------- ------------- ---------------- ---------------
Net loss ($8,343) ($4,772) ($13,292) ($18,212)
============== ============= ================ ===============
Net loss per share:
Basic and diluted ($0.31) ($0.21) ($0.55) ($0.82)
Weighted average number of shares outstanding:
Basic and diluted 26,742 22,297 24,076 22,259
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ATS MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Year Ended December 31,
----------------------------------
2003 2002
-------------- ----------------
CURRENT ASSETS
Cash and short-term investments $8,475 $9,974
Accounts receivable 4,939 3,557
Inventories 20,377 15,876
Prepaid expenses 508 382
-------------- ----------------
Total current assets 34,299 29,789
Property and equipment, net 5,895 6,026
Other inventories 17,000 37,000
Technology license 18,500 18,500
Other assets 440 441
-------------- ----------------
TOTAL ASSETS $76,134 $91,756
============== ================
CURRENT LIABILITIES
Accounts payable and accrued expenses $3,331 $3,549
Current maturities of long-term debt 0 5,000
-------------- ----------------
Total current liabilities 3,331 8,549
Long-term debt 0 9,080
Shareholders' equity 72,803 74,127
-------------- ----------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $76,134 $91,756
============== ================
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ATS MEDICAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
Year ended December 31,
----------------------------------
2003 2002
-------------- ----------------
OPERATING ACTIVITIES
Net loss ($13,292) ($18,212)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 792 713
Loss on disposal of equipment 4 35
Compensation expense on stock options 321 0
Imputed interest long-term debt 320 480
Impairment of technology license 0 8,100
Extinguishment of debt (2,575) 0
Changes in operating assets and liabilities 13,950 5,985
-------------- ----------------
Net cash used in operating activities (480) (2,899)
INVESTING ACTIVITIES
Purchase of short-term investments, net of sales 498 5,197
Payments for technology license (12,000) 0
Net purchases of furniture, machinery and equipment (665) (21)
-------------- ----------------
Net cash provided by (used in) investing activities (12,167) 5,176
FINANCING ACTIVITIES
Net proceeds from sale of common stock 11,592 120
-------------- ----------------
Net cash provided by financing activities 11,592 120
Effect of exchange rate changes on cash 55 (4)
-------------- ----------------
Increase (decrease) in cash and
cash equivalents ($1,000) $2,393
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