EXHIBIT 99.1
Contact: Michael Dale, President/CEO
Jack Judd, Chief Financial Officer
763/553-7736
EVC Group, Inc.
Doug Sherk, Jennifer Beugelmans
415/896-6820
FOR IMMEDIATE RELEASE
ATS MEDICAL REPORTS FIRST QUARTER FINANCIAL RESULTS
US Sales Grow 20% Year-Over-Year and 16% Sequentially
Company Reconfirms Full Year 2005 Outlook
MINNEAPOLIS, May 3, 2005 --ATS Medical, Inc. (Nasdaq: ATSI), developer,
manufacturer and marketer of cardiac surgery products and services, including
the ATS Open Pivot(R) mechanical heart valve, today reported that sales for the
first quarter of 2005 increased 6% to $7.1 million, compared with sales of $6.7
million for the first quarter of 2004. The net loss for the first quarter of
2005 was $4.0 million, or $0.13 per share, compared with a net loss of $3.3
million, or $0.12 per share, in the first quarter of 2004.
"Although our sales growth rate decreased during the first quarter, we remain on
target to achieve our full year sales growth rate goal of 20 to 25%," said
Michael D. Dale, President and CEO of ATS Medical. "During the past quarter we
implemented direct efforts and supplemented distribution in certain key
international markets as part of our ongoing effort to continually improve our
business model through increased control of sales and marketing and improved
profitability. While these efforts negatively affected international sales
during the quarter, the reduced growth rate is timing related and not reflective
of any loss of business. On the contrary, we remain optimistic regarding our
expectations for continued growth in our international business for 2005.
Domestically during the first quarter, we continued to make progress in gaining
traction and market share in the US, which we believe is now more than 10
percent of mechanical heart valve procedures. In addition, while the total
number of US open heart centers where we have a presence continues to grow, more
importantly, the number of customers that we did business with during the past
12-month period grew significantly. As of March 31, 2005, the number of
customers that we did business with grew 37% compared with the previous 12-month
period ended March 31, 2004. We believe that this statistic illustrates the
progress we are making in converting new customers into repeat sales."
"The first quarter was also notable as it represented our first full quarter of
partnership with CyroCath Technologies in the US. Our efforts to build awareness
and market share for the surgical treatment of cardiac arrhythmias with
CryoCath's surgical products has thus far been, in all respects, a successful
partnership." continued Mr. Dale. "Based on our experience during first quarter
we remain excited about the opportunities for this technology and continue to
believe that it will generate material revenue and profits for our shareholders
as well as complement our existing selling efforts for the ATS Open Pivot(R)
heart valve. We believe that this experience further validates our strategy of
growing our portfolio of technology dedicated to the cardiac surgeon and we
continue to evaluate other opportunities to broaden our business opportunity in
cardiac surgery. In summary, combined heart valve and CryoCath product sales
resulted in US sales revenue growth of 20% compared with the first quarter of
2004 and 16% compared with the fourth quarter of 2004."
"Looking ahead to the remainder of 2005, we reconfirm our guidance for total
sales growth for the full year of between 20% and 25% compared with 2004, which
implies a range of $33 million to $35 million. We also continue to expect that
we will consume our remaining high cost pyrolytic carbon inventory early in
2006. Our strategy to self-manufacture 100% of our future product component
requirements remains on schedule, and our cash balances to support this effort
as well as other business operations remains sufficient to see us through
profitability, which we still predict will occur in the first half of 2006."
concluded Mr. Dale.
CONFERENCE CALL TODAY
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ATS management will host a conference call and web cast today, May 3, 2005 at
4:30 p.m. ET to discuss its first quarter financial results, outlook for the
remainder of 2005 and current corporate developments. The dial in number for the
conference call is 800-219-6110 for domestic participants and 303-262-2139 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 Midnight ET on Tuesday, May 10, 2005 and can be accessed by dialing
800-405-2236 for domestic callers and 303-590-3000 for international callers,
using the passcode 11027542#. A live webcast of the call can be accessed at
http://www.atsmedical.com by clicking on the Investors icon. The webcast will
also be archived on the company's website.
ABOUT ATS MEDICAL
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ATS Medical manufactures and markets products and services focused on cardiac
surgery. It is headquartered in Minneapolis and is global in scope with sales in
more than 45 countries. The ATS Open Pivot heart valve has been implanted in
over 100,000 patients and utilizes a unique pivot design resulting in improved
performance and a lower risk profile. The ATS Medical web site is
www.atsmedical.com.
SAFE HARBOR
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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-K for the year ended December 31, 2004.
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ATS MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three months ended
March 31,
-------------------------
2005 2004
-------- --------
Net sales $ 7,063 $ 6,694
Cost of goods sold 4,301 4,766
-------- --------
Gross profit 2,762 1,928
Operating expenses:
Sales and marketing 4,731 3,666
Research and development 302 187
General and administrative 1,689 1,381
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Total operating expenses 6,722 5,234
-------- --------
Operating loss (3,960) (3,306)
-------- --------
Interest income 1 1
-------- --------
Net loss ($ 3,959) ($ 3,305)
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Net loss per share:
Basic and diluted ($ 0.13) ($ 0.12)
Weighted average number of shares outstanding:
Basic and diluted 30,913 26,802
ATS MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
March 31, December 31,
2005 2004
------- -------
ASSETS
Cash and short-term investments $ 9,660 $15,994
Accounts receivable 8,349 7,893
Inventories 26,982 24,303
Prepaid expenses 1,050 1,053
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Total current assets 46,041 49,243
Property and equipment, net 7,865 7,650
Other inventories -- 3,000
Intangible assets 18,713 18,720
Other assets 436 438
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TOTAL ASSETS $73,055 $79,051
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LIABILITIES & SHAREHOLDERS' EQUITY
Accounts payable $ 2,811 $ 4,049
Accrued compensation 1,208 1,797
Other accrued liabilities 1,118 1,174
Current maturities of long-term debt 833 764
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Total current liabilities 5,970 7,784
Long-term liabilities 1,564 1,826
Shareholders' equity 65,521 69,441
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TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $73,055 $79,051
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ATS MEDICAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(IN THOUSANDS)
Three months ended March 31,
----------------------------
2005 2004
------- -------
OPERATING ACTIVITIES
Net loss ($3,959) ($3,305)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 369 265
Compensation expense on stock options 4 25
Loss on disposal of equipment 17 --
Non-cash interest expense 7 --
Changes in operating assets and liabilities (2,067) 2,527
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Net cash used by operating activities (5,629) (488)
INVESTING ACTIVITIES
Maturities of short-term investments, net of purchases 3,396 250
Net purchases of furniture, machinery and equipment (601) (108)
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Net cash provided by investing activities 2,795 142
FINANCING ACTIVITIES
Net proceeds from sale of common stock 92 118
Repayments on note payable (139) --
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Net cash provided by (used in) financing activities (47) 118
Other items (57) (11)
------- -------
Decrease in cash and cash equivalents ($2,938) ($ 239)
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