Exhibit 99.1
Possis Medical, Inc. Reports
First-Quarter Results
Sales Rise 21 Percent Over Prior Year with Continuing AngioJet(R)
Ultra System Placements
MINNEAPOLIS--(BUSINESS WIRE)--Nov. 21, 2007--Possis Medical, Inc.
(NASDAQ:POSS), a developer, manufacturer and marketer of pioneering
medical devices used in endovascular procedures, today reported
results for its fiscal 2008 first quarter.
For the first quarter ended Oct. 31, 2007, Possis' net sales
increased 21 percent to $18.9 million from fiscal 2007 first-quarter
sales of $15.6 million. The Company reported net earnings of $104,000,
or $0.01 per diluted share, versus a net loss of $234,000, or $0.01
per diluted share, for the prior-year period. This includes
stock-based compensation expense of $443,000, net of tax, or $0.03 per
diluted share, and $666,000, net of tax, or $0.04 per diluted share,
for the fiscal 2008 and 2007 first quarters, respectively.
"Ongoing strong physician acceptance of our AngioJet(R) Ultra
System continues to generate momentum in the marketplace, driving
double-digit sales growth, and helping us surpass our top-line
expectations," said Robert G. Dutcher, CEO of Possis Medical.
"Although we exceeded our bottom-line expectations for the quarter,
similar double-digit gains in earnings are being constrained by the
costs of launching and placing Ultra Consoles combined with further
expansion of our sales force. We expect these trends will moderate in
the coming quarters. Our number one goal is to establish a sustainable
infrastructure for growth--and with continuing success placing Ultra
Consoles, we are achieving that goal."
As previously disclosed, Possis has increased its allowance for
sales returns due to the AngioJet Ultra Thrombectomy System launch.
The Company's fiscal first-quarter allowance for sales returns was 2.6
percent of gross revenue. This is up from approximately 1 percent for
the year-ago quarter, but down from 3.6 percent of gross revenue in
the sequential fiscal 2007 fourth quarter. The year-over-year increase
is due to the expected rise in returns of disposable product inventory
usable only with the previous-generation AngioJet System, as a result
of customer conversion to the new Ultra System.
AngioJet Ultra Console placements increased to 145 units in the
fiscal 2008 first quarter from 135 units sequentially in the fiscal
2007 fourth quarter. To date, 389 Ultra Consoles have been placed
throughout the United States. Sales of Ultra Thrombectomy Sets
represented roughly 34 percent of total disposable revenue in the
fiscal 2008 first quarter. Gross revenue in the first quarter
increased 23 percent versus the same period one year ago; gross
revenue was down 2 percent sequentially from the fiscal 2007 fourth
quarter. Please refer to the table on page 6 for additional details on
revenue and sales returns.
According to Dutcher, "In the first quarter, our coronary,
peripheral and AV access AngioJet catheter lines all delivered
year-over-year growth--a testament to the Ultra System's ease-of-use
and effectiveness. Sequentially, both the peripheral and AV access
catheter lines increased. As we anticipated, the coronary catheter
line was down slightly from the fiscal 2007 fourth quarter due to
typical first-quarter seasonality."
Dutcher said that sales of non-AngioJet products, including the
SafeSeal(TM) Hemostasis Patch and the Fetch(R) Aspiration Catheter,
rose from the prior-year first quarter.
Possis sold 61 new AngioJet Ultra Consoles and 16 prior-generation
drive units worldwide in the fiscal 2008 first quarter. Total
worldwide drive units and consoles in the field, which contributes to
catheter usage and sales, increased sequentially to 2,242 at the end
of the first quarter from 2,144 units at the end of the fiscal 2007
fourth quarter, and up from 1,871 units at the end of the year-earlier
first quarter. Of total drive units in the field, 389 are the new
AngioJet Ultra Consoles.
Possis said that it has expanded its sales force to 87 members, up
from 80 at the end of July. Noted Dutcher, "Our sales force
investments have resulted in a stable, effective team, and we believe
our retention levels are now above the industry norm."
For the first quarter, Possis' gross profit margin was 69.4
percent, up sequentially from 68.4 percent in the fiscal 2007 fourth
quarter, and versus 71.7 percent in the year-ago first quarter. The
year-over-year decrease was primarily due to a shift in overall sales
mix to lower-margin Ultra System Consoles from disposables. As more
Ultra Consoles are placed, Ultra Thrombectomy Set usage is expected to
build, leading to a higher-margin product mix and lower manufacturing
costs. The sequential improvement in the fiscal 2008 first quarter
gross profit margin is evidence of this trend. Sequentially and
year-over-year, average selling prices remained firm across the
Company's product lines.
Selling, general and administrative expenses (SG&A) increased by
$1.3 million from the year-earlier first quarter, to $11.2 million.
Sales force additions and commissions on higher sales levels, combined
with additional marketing expenses to support new product launches,
contributed to the rise.
Fiscal 2008 first-quarter research and development (R&D) spending
decreased slightly to $2.3 million. R&D spending represented 12.3
percent of first-quarter revenue. Possis will continue to aggressively
develop new AngioJet and non-AngioJet products and clinical
applications.
On Oct. 31, 2007, cash, cash equivalents and marketable securities
totaled $40.4 million, down from $42.9 million on July 31, 2007. This
decrease is primarily due to deposits required to secure future Ultra
System Console purchase commitments. On December 19, 2006, Possis'
board of directors authorized the Company to repurchase up to $15
million of its common stock over the two years ending December 31,
2008. While Possis did not repurchase any common stock during the
first quarter, the Company remains committed to buying back additional
shares going forward to offset dilution from stock-based compensation
programs.
Said Dutcher, "We're encouraged by our solid start to fiscal 2008.
With sales up 21 percent year over year, it's clear that our Ultra
System is gaining traction. Our goal for the remainder of fiscal 2008
is to continue to drive top-line growth and improve bottom-line
performance by placing additional Ultra Systems, achieving new
catheter set and endovascular product approvals, and strengthening our
portfolio of supporting clinical science."
Product Update
AngioJet Ultra System
Possis continued successful full-market release of its AngioJet
Ultra System during the first quarter. With nearly 400 units placed
and now operational, the Company is seeing a corresponding sequential
and year-over-year rise in overall catheter sales.
Said Dutcher, "The Ultra System features much faster and more
reliable set-up than the previous generation AngioJet System--while
retaining the same proven therapeutic effectiveness. We believe that
our increase in catheter sales is directly related to the Ultra
System's ease-of-use benefits, and we expect catheter sales to
continue to rise as we convert more customers to the Ultra System."
Securing complete market access for new and improved Ultra
Thrombectomy Set designs which capitalize on the increased
capabilities of the Ultra Console remains a focus for Possis. The
Spiroflex(R) VG catheter, the last of the current AngioJet Catheter
models to be released in an Ultra-compatible version, is expected to
be launched by the end of the current fiscal quarter.
Non-AngioJet Products
As noted, sales of Possis' non-AngioJet products, which include
the SafeSeal Hemostasis Patch and the Fetch Aspiration Catheter, rose
from the fiscal 2007 first quarter. Marketplace acceptance and a fully
staffed Possis sales team helped contribute to the increase.
According to Dutcher, "We will continue to explore new
non-AngioJet markets and products to broaden our endovascular
portfolio. In addition to providing a complete thrombus management
solution, it's important that we offer products that complement and
enhance the effectiveness of our core technology. The GuardDOG(R)
Occlusion Guidewire System is one example of this strategy."
The GuardDOG System is used to temporarily occlude blood flow
during vascular interventions, offering physicians greater control
when employing endovascular catheter treatments such as AngioJet
thrombectomy. Possis is continuing its limited market evaluation of
the 0.035" GuardDOG Occlusion Guidewire System, which began in July. A
full U.S. market release is expected later this fiscal year, with a
second GuardDOG model, featuring a thinner 0.014" guidewire, slated
for introduction one or two quarters later.
Clinical Science Update
Coronary Thrombectomy
In August 2007, the Journal of the American College of Cardiology
formally published a clinical study showing dramatically favorable
results for AngioJet treatment of heart attack patients with large
thrombus, including a 9-fold decrease in the occurrence of stent
thrombosis after drug-eluting stent placement in heart attack patients
with large thrombus. The study was conducted by Dr. George Sianos and
colleagues at the ThoraxCenter in Rotterdam, the Netherlands.
At the annual Transcatheter Cardiovascular Therapeutics (TCT)
meeting in October, Possis sponsored a breakfast seminar at which Dr.
Sianos discussed his findings. Also at that seminar, Dr. Cindy Grines
of William Beaumont Hospital in Royal Oak, Michigan, presented results
of a meta-analysis of published outcomes in heart attack patients
treated with the AngioJet System, showing that AngioJet thrombectomy
in higher-risk thrombosed lesions yields similar clinical safety to
that of conventional treatments in lower-risk, non-thrombosed lesions.
Finally, Dr. Fadi Matar of Tampa General Hospital in Florida presented
the most recent findings from the multicenter Cardioquest
interventional cardiology database, highlighting the value of AngioJet
thrombectomy in treating saphenous vein graft disease.
Possis' JETSTENT clinical trial of AngioJet thrombectomy in heart
attack patients with large thrombus has enrolled more than 230
patients to date at nine active sites, mostly in Europe. The next
planned interim analysis will be conducted over the next several
months.
Peripheral Arterial Thrombus and Venous Thromboembolic (VTE)
Disease
Possis continues to develop several significant new clinical
science initiatives to support its peripheral vascular product
offerings. The Company's prospective, Web-based PEARL registry
(PEripheral use of AngioJet Rheolytic Thrombectomy with Mid-Length
Catheters) continues active patient enrollment, now with more than 130
patients enrolled to date, treated with either the AngioJet DVX(R) or
Xpeedior(R) catheter. Eventually, the PEARL registry will involve 20
or more high-volume peripheral AngioJet thrombectomy centers to be an
ongoing source of case studies, scientific presentations, and
publications on the uses and clinical value of AngioJet thrombectomy
in a variety of peripheral vascular disease challenges. The Company
plans to include clinical experience with the GuardDOG device in the
PEARL registry as well. In addition, Possis expects the initial
clinical experiences with the GuardDOG device to be the subject of
scientific presentations and publications.
Business Outlook
Looking ahead, Possis Medical increased its full-year revenue
guidance to $77 million or higher, with a gross margin of
approximately 70 percent. Net income is expected to be in the range of
$0.18 to $0.23 per diluted share. Prior fiscal 2008 guidance projected
revenue of $75 million or higher.
The Company anticipates fiscal 2008 second-quarter net sales of
$18.7 million to $19.2 million. This is up from year-earlier sales of
$15.8 million. Net income is expected to range between $0.03 to $0.05
per diluted share, versus a loss of $0.01 per diluted share in the
second quarter of fiscal 2007.
The Company will host a conference call today, Wednesday, Nov. 21,
2007, at 9:30 a.m. (CT). Bob Dutcher, Chairman & CEO, and Jules
Fisher, CFO, will discuss fiscal 2008 first-quarter operating results.
To join the conference call, dial 1-800-762-9058 (international
1-480-629-9031). A replay of the conference call will be available one
hour after the call ends through 11:59 p.m. (CT) on November 27, 2007.
To access the replay, dial 1-800-406-7325 (international
1-303-590-3030) and enter the access code 3804781.
For individual investors, a Webcast of the conference call will be
available at www.possis.com under the "Investors" tab, or at
www.fulldisclosure.com. Institutional investors can access the Webcast
through a password-protected site at www.streetevents.com. An archived
Webcast of Possis' conference call will be available for 30 days.
About Possis Medical, Inc.
Possis Medical, Inc., develops, manufactures and markets
pioneering medical devices for the large and growing cardiovascular
and vascular treatment markets. The Company's AngioJet System is the
world's leading mechanical thrombectomy system with FDA approval to
remove large and small thrombus from coronary arteries, coronary
bypass grafts, peripheral arteries and veins, A-V grafts and native
fistulas.
Certain statements in this press release constitute
"forward-looking statements" within the meaning of Federal Securities
Laws. Some of these statements relate to estimated future revenue,
gross margins, expenses and earnings per share, regulatory approvals,
new product introductions, product development, and clinical
initiatives. These statements are based on our current expectations
and assumptions, and entail various risks and uncertainties that could
cause actual results to differ materially from those expressed in such
forward-looking statements, such as, the effectiveness of our sales
and marketing efforts, our ability to effectively manage new product
development timelines, and our ability to generate suitable clinical
data to support growing use of the AngioJet System. A discussion of
these and other factors that could impact the Company's future results
are set forth in the cautionary statements included in the Company's
Form 10-K for the year ended July 31, 2007, filed with the Securities
and Exchange Commission.
POSSIS MEDICAL, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME
(LOSS)
FOR THE THREE MONTHS ENDED OCTOBER 2007 AND 2006
(UNAUDITED)
2007 2006
------------ ------------
Product sales............................... $18,869,371 $15,603,881
Cost of sales and other expenses:
Cost of medical products................. 5,766,956 4,408,194
Selling, general and administrative...... 11,163,997 9,816,040
Research and development................. 2,322,211 2,414,679
------------ ------------
Cost of sales and other expenses..... 19,253,164 16,638,913
------------ ------------
Operating loss.............................. (383,793) (1,035,032)
Interest income......................... 503,383 539,492
Gain on sale of securities.............. 70,675 18,891
------------ ------------
Income (loss) before income taxes........... 190,265 (476,649)
Provision (benefit) for income taxes........ 86,050 (243,000)
------------ ------------
Net income (loss)........................... 104,215 (233,649)
Other comprehensive income (loss), net of
tax:
Unrealized gain on securities............... 63,000 193,000
------------ ------------
Comprehensive income (loss)................. $ 167,215 $ (40,649)
============ ============
Weighted average number of common shares
outstanding:
Basic................................... 16,934,129 17,149,993
Diluted................................. 17,625,328 17,149,993
Net income (loss) per common share:
Basic................................... $ 0.01 $ (0.01)
============ ============
Diluted................................. $ 0.01 $ (0.01)
============ ============
See notes to consolidated financial statements.
POSSIS MEDICAL, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS October 31, 2007 July 31, 2007
---------------- ---------------
CURRENT ASSETS:
Cash and cash equivalents.......... $ 5,635,132 $ 2,664,607
Marketable securities.............. 34,814,069 40,207,324
Trade receivables (less allowance
for doubtful accounts and returns
of $1,128,000 and $1,131,000,
respectively)..................... 8,207,271 8,647,569
Inventories........................ 11,072,844 9,351,888
Prepaid expenses and other assets.. 3,087,085 2,955,583
Deferred tax asset................. 2,010,000 2,010,000
---------------- ---------------
Total current assets............ 64,826,401 65,836,971
PROPERTY AND EQUIPMENT, net.......... 4,734,938 4,872,574
DEFERRED TAX ASSET................... 9,793,117 9,518,000
INVESTMENT IN RAFAEL MEDICAL......... 2,612,887 2,612,887
LONG-TERM INVENTORY DEPOSIT.......... 1,590,000 --
OTHER ASSET.......................... 1,175,523 1,080,889
---------------- ---------------
TOTAL ASSETS......................... $ 84,732,866 $ 83,921,321
================ ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable............. $ 2,664,649 $ 2,558,413
Accrued salaries, wages, and
commissions....................... 3,528,503 4,503,546
Other liabilities.................. 2,707,416 2,369,801
---------------- ---------------
Total current liabilities....... 8,900,568 9,431,760
OTHER LIABILITIES.................... 1,303,609 1,201,743
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock-authorized,
100,000,000 shares of $0.40 par
value each; issued and
outstanding, 16,987,283 and
16,894,416 shares, respectively... 6,794,913 6,757,766
Additional paid-in capital......... 78,260,057 77,538,548
Accumulated other comprehensive
gain (loss)....................... 3,000 (60,000)
Retained deficit................... (10,529,281) (10,948,496)
---------------- ---------------
Total shareholders' equity...... 74,528,689 73,287,818
---------------- ---------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY.............................. $ 84,732,866 $ 83,921,321
================ ===============
AngioJet System Key Business Indicators
Worldwide Market Data Q1-07 Q2-07 Q3-07 Q4-07 Q1-08
- ----------------------------------------------------------------------
AngioJet Revenue - $(000) $15,436 $15,439 $15,619 $18,154 $18,092
- ----------------------------------------------------------------------
AngioJet 3000 Drive Units Sold 35 19 15 13 16
- ----------------------------------------------------------------------
AngioJet Ultra Consoles Sold - 10 36 67 61
- ----------------------------------------------------------------------
AngioJet 3000 Drive Units &
Ultra Consoles in the Field 1,871 1,899 1,966 2,144 2,242
- ----------------------------------------------------------------------
AngioJet Catheters Sold 11,693 11,835 11,227 12,586 12,603
- ----------------------------------------------------------------------
Below is the quarterly effect of Stock-Based Compensation Expense
under SFAS 123(R) on the operations of the Company. All amounts are in
thousands except for EPS diluted.
Q1-07 Q2-07 Q3-07 Q4-07 Q1-08
- ----------------------------------------------------------------------
Cost of medical products $ 94 $ 93 $ 89 $ 75 $ 68
- ----------------------------------------------------------------------
Selling, general and
administrative 584 587 613 492 419
- ----------------------------------------------------------------------
Research and development 174 175 174 139 130
- ----------------------------------------------------------------------
Income tax provision (186) (193) (207) (175) (174)
- ----------------------------------------------------------------------
Net income (666) (662) (669) (531) 443
- ----------------------------------------------------------------------
EPS diluted (0.04) (0.04) (0.04) (0.03) (0.03)
- ----------------------------------------------------------------------
--------------------------------------------
Q1-07 Q2-07 Q3-07 Q4-07 Q1-08
--------------------------------------------
Gross Product Sales $15,784 $16,066 $16,800 $19,720 $19,379
--------------------------------------------
Less: Sales Returns &
Allowances (180) (260) (560) (715) (510)
--------------------------------------------
Net Product Sales 15,604 15,806 16,240 19,005 18,869
--------------------------------------------
CONTACT: Possis Medical, Inc.
Jules L. Fisher, 763-450-8011
Vice President, Finance and
Chief Financial Officer
Jules.Fisher@possis.com