Exhibit 99.1
[THORATEC LOGO]
THORATEC REPORTS 22 PERCENT INCREASE IN REVENUES;
SIGNIFICANT GROWTH IN EARNINGS
CONTINUED STRENGTH IN VAD MARKET
AND ITC BUSINESS DRIVES GROWTH
(PLEASANTON, CA), April 22, 2003 -- Thoratec Corporation (NASDAQ: THOR), a
world leader in products to treat cardiovascular disease, said today that
product revenues in the first quarter of 2003 increased by 22 percent over those
in the first quarter of last year.
Product sales for the quarter ended March 29, 2003, were $36.1 million
versus $29.6 million in the first quarter of 2002.
Cash earnings, which the company defines as net income before taxes and
excluding merger, restructuring and other expenses, and amortization of
purchased intangible assets, were $5.4 million, or $0.10 per share, versus
$485,000, or $0.01 per share, in the same period a year ago. Further information
is provided in a table below to reconcile cash earnings as disclosed in this
press release to reported GAAP net income before taxes.
On an as reported basis, Thoratec reported net income of $1.4 million, or
$0.03 per share, versus a loss of $1.8 million, or $0.03 per share, in the first
quarter a year ago.
"Our performance in this quarter, which comes on the heels of a 12 percent
increase in revenues for the prior quarter, demonstrates our growing presence in
the treatment of cardiovascular diseases," said D. Keith Grossman, president and
chief executive officer.
"The company recorded a 24 percent increase in its VAD (ventricular assist
device) business, resulting from strong demand in both the U.S. and Europe.
While over the long-term, the growth in the bridge-to-transplant market will
likely continue to be sporadic, it has remained vibrant over the past two
quarters.
TNR-328 Continued.....
"We also benefited from an 11 percent increase in sales at our
International Technidyne Corporation (ITC) division. ITC experienced dramatic
growth in sales of its ProTime(R) blood coagulation testing systems, driven by
strong demand in both the professional and home testing markets," he added.
Due in part to the growth in revenues, the company reported that it added
more than $5 million in cash and investments to its balance sheet during the
quarter.
In addition to the revenue growth, Grossman said the quarter was
highlighted by two key milestones achieved in the Destination Therapy area -- a
favorable outcome at the Medicare Coverage Advisory Committee (MCAC) meeting and
FDA approval of the company's HeartMate(R) XVE for use in Destination Therapy.
Destination Therapy is the permanent support for end-stage heart failure
patients who are not eligible for heart transplantation. Last November, the FDA
approved the use of Thoratec's HeartMate SNAP-VE LVAS (left ventricular assist
system) for Destination Therapy, the first time a ventricular assist device has
been approved to provide permanent support for these patients.
On March 12, MCAC voted favorably on the two questions presented them by
the Centers for Medicare and Medicaid Services (CMS) regarding Medicare coverage
for the use of Left Ventricular Assist Devices (LVADs) for Destination Therapy.
MCAC serves as an advisory board to CMS to review new and leading-edge treatment
options.
CMS is currently considering MCAC's recommendation and, based on their
guidelines, is expected to reach a National Coverage Decision this summer.
"We were delighted with MCAC's decision as it demonstrated that they
recognize the important role that LVADs can play in the treatment of end-stage
heart failure patients who are not eligible for heart transplantation and that
the use of these devices improves health outcomes both qualitatively and
quantitatively," Grossman noted. "Our discussions with CMS continue to be very
positive and a strong alliance of the nation's leading medical professional
organizations are also deeply involved in the reimbursement discussion," he
continued.
"Since approval, there have been a relatively small number of Destination
Therapy procedures of which we are aware, with generally favorable outcomes.
Since the Blue Cross/Blue Shield (BC/BS) Technology Evaluation Center issued its
decision on the use of LVADs for Destination Therapy late last year, six BC/BS
plans around the country have issued positive coverage polices for their
beneficiaries in writing. Furthermore, Aetna U.S. Healthcare, the fourth largest
insurer in the U.S. covering more than 21 million people, recently issued a
Coverage Policy Bulletin indicating that it now covers the use of ventricular
assist devices for FDA-approved indications, including Destination Therapy.
Nevertheless, receiving Medicare reimbursement will be the critical factor in
its growth," he added.
TNR-328 Continued.....
As announced earlier this month, the FDA has also approved the use of the
HeartMate XVE for Destination Therapy. The XVE incorporates a number of
significant improvements to earlier versions of the HeartMate VE designed to
ease implantation, provide for longer and more reliable device life and improve
patient outcomes.
"We now have nearly 75 years of cumulative VAD patient days on the XVE as
a bridge-to-transplant, with very positive results. The feedback from clinicians
indicates that they have seen a significantly lower rate of complications, with
many types of incidents virtually eliminated," noted Jeffrey Nelson, president
of Thoratec's Cardiovascular Division. "Initial shipments of the XVE for
Destination Therapy will begin immediately. We believe that the improved
outcomes achieved with the XVE as a bridge-to-transplant will facilitate
adoption of Destination Therapy," he added.
Thoratec also said it has now implanted 22 patients in clinical trials
with the Thoratec(R) Implantable Ventricular Assist Device (IVAD), including 12
in the U.S. and ten in Europe, and is on track to file for European marketing
approval by the end of the second quarter.
In addition to achieving revenue growth, ITC has also continued its new
product introduction efforts. "Earlier this month, we introduced Hemoglobin Pro,
an alternate site testing instrument that can analyze a drop of blood in less
than 30 seconds for indications of anemia or internal bleeding. We believe the
potential market for point of care Hemoglobin testing is $50 million annually,"
said Larry Cohen, president of Thoratec's ITC division.
"In addition," he continued, "the company's enhanced HEMOCHRON Response
system, Response 2.0, has received FDA approval and will be launched in the next
few weeks. This system includes a software tool for helping to determine heparin
dosing requirements during cardiac surgery."
Thoratec Corporation is a world leader in products to treat cardiovascular
disease with its Thoratec(R) VAD and HeartMate LVAS implanted in more than 5,800
patients suffering from heart failure. Thoratec's product line also includes the
Vectra(R) vascular access graft (VAG) for patients undergoing hemodialysis.
Additionally, its International Technidyne Corporation (ITC) division supplies
blood coagulation testing and skin incision products. Thoratec is headquartered
in Pleasanton, California. For more information, visit the company's web sites
at http://www.thoratec.com or http://www.itcmed.com.
TNR-328 Continued.....
The portions of this news release that relate to future plans, events or
performance are forward-looking statements. Investors are cautioned that all
such statements involve risk and uncertainties, including risks related to
continuing analysis of the REMATCH trial data, regulatory approval processes and
healthcare reimbursement and coverage policies. These factors, and others, are
discussed more fully under the heading, "Risk Factors" in Thoratec's 10-K for
the fiscal year ended December 28, 2002, and other filings with the Securities
and Exchange Commission. Actual results, events or performance may differ
materially. These forward-looking statements speak only as of the date hereof.
Thoratec undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements that may be made to reflect events
or circumstances after the date hereof, or to reflect the occurrence of
unanticipated events.
Investor Contact Information: Media Contact Information:
- ----------------------------- --------------------------
Wayne Boylston April Grefthen/Sheila Rasu
Chief Financial Officer FischerHealth, Inc.
Thoratec Corporation (310) 577-7870, ext. 165/151
(925) 847-8600 agrefthen@fischerhealth.com
srasu@fischerhealth.com
####
THORATEC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
(Unaudited)
(in thousands)
March December
2003 2002
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 48,747 $ 42,044
Short-term available-for-sale investments - 3,439
Receivables, net 24,548 27,593
Inventories 39,122 38,835
Deferred tax asset 11,888 12,182
Prepaid expenses and other assets 3,452 2,517
---------- ----------
Total Current Assets 127,757 126,610
Property, plant and equipment, net 24,682 24,715
Long-term available-for-sale investments 31,981 30,051
Goodwill 96,492 96,492
Purchased intangible assets 181,259 184,282
Other assets 4,914 6,282
---------- ----------
TOTAL ASSETS $ 467,085 $ 468,432
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,574 $ 6,319
Accrued expenses 10,401 11,111
Accrued merger, restructuring and other 103 1,208
---------- ----------
Total Current Liabilities 16,078 18,638
Long-term deferred tax liability and other 74,223 75,454
---------- ----------
Total Liabilities 90,301 94,092
Shareholders' Equity 376,784 374,340
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 467,085 $ 468,432
========== ==========
THORATEC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)
Three Months Ended
---------- ----------
March March
2003 2002
--------- ---------
Product sales $ 36,062 $ 29,639
Cost of product sales 14,891 13,164
--------- ---------
Gross profit 21,171 16,475
--------- ---------
Operating expenses:
Selling, general and administrative 10,060 8,719
Research and development 6,260 6,903
Amortization of purchased intangible assets 3,096 3,096
Merger, restructuring and other costs (57) 321
--------- ---------
Total operating expenses 19,359 19,039
--------- ---------
Income (loss) from operations 1,812 (2,564)
Interest and other income (expense) -- net 512 (368)
--------- ---------
Income (loss) before taxes 2,324 (2,932)
Income tax expense (benefit) 906 (1,174)
--------- ---------
Net income (loss) $ 1,418 $ (1,758)
========= =========
Net income (loss) per share:
Basic $ 0.03 $ (0.03)
========= =========
Diluted $ 0.03 $ (0.03)
========= =========
Shares used to compute net income (loss) per share:
Basic 55,057 56,650
Diluted 55,534 56,650
Reconciliation of Cash Earnings to Net Income Before Taxes
This press release discloses "cash earnings" which is not a financial
measure prepared in accordance with United States Generally Accepted Accounting
Principles ("GAAP"). Management believes that cash earnings can be a useful
measure for investors to evaluate our financial performance by providing the
results of our company's primary business operations excluding the effects of
charges associated with our merger, restructuring and other activities.
However, this measure should be considered in addition to, and not as a
substitute, or superior to, net income before taxes or other measures of
financial performance prepared in accordance with GAAP. Cash earnings has been
reconciled to net income before taxes, the most directly comparable GAAP
financial measure, as follows:
Three Months Ended
-----------------------
March March
2003 2002
-------- --------
Net income (loss) before taxes as reported under GAAP $ 2,324 $ (2,932)
Adjustments to reconcile GAAP net income (loss) before taxes
with cash earnings:
Amortization of purchased intangible assets 3,096 3,096
Merger, restructuring and other costs (57) 321
-------- --------
Cash earnings $ 5,363 $ 485
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Basic and diluted cash earnings per share $ 0.10 $ 0.01
======== ========