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Angeion Corporation FOR IMMEDIATE RELEASE
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Angeion Corporation Reports Fiscal 2009 Third-Quarter Results Highlights
ST. PAUL, Minn. — (August 26, 2009) — Angeion Corporation (NASDAQ: ANGN) today reported results for its fiscal third quarter ended July 31, 2009. For the 2009 third quarter, Angeion posted a net loss of $173,000, or $0.04 per diluted share, on revenues of $6.2 million. This represents a sequential improvement from a 2009 second-quarter net loss of $225,000, or $0.05 per diluted share, also on revenues of $6.2 million. Compared to the prior year third quarter, which generated net income of $259,000, or $0.06 per diluted share, current-year earnings decreased $432,000, or $0.10 per diluted share, due to a $1.4 million decrease in revenues. While third quarter 2009 revenues continued to feel the impact of the economic downturn and its on-going pressure on capital spending by hospitals and clinics, the Company was encouraged by a sequential improvement in sales between the second and third quarters of 2009, especially since the fiscal second quarter included three uncommonly large shipments which represented $663,000 of that quarter’s total volume. With respect to the fiscal third quarter, despite not having any atypical shipments such as those noted above, Angeion still delivered sequentially higher revenues for the period, as well as stronger gross margins (54.4% versus 53.2% in the 2009 second quarter). Third-quarter revenue to international customers represented 20.8% of the total while on a year-to-date basis, international business accounted for 20.7% of total sales. “Given the ongoing tough global economic conditions and continued pressures on capital spending facing hospitals and physician clinics, we are encouraged by our third-quarter results, achieving sequential quarterly sales gains,” said Rodney A. Young, Angeion’s President and Chief Executive Officer. “In recent quarters we’ve taken definitive actions to: sharply focus on closing each potential account sale; aggressively manage operating expenses; and prioritize new product and business development activities. These initiatives are taking hold and producing positive results. We are on our way to realizing our longer-term growth prospects and executing our strategic priorities to bring a restoration of growth, profitability and shareholder value.” For the nine months ended July 31, 2009, Angeion reported a net loss of $1.0 million, or $0.25 per diluted share, on revenues of $18.9 million. This compares to a net loss of $789,000, or $0.19 per diluted share, on revenues of $22.4 million for the 2008 nine- month period. Approximately $1.1 million of the 2009 nine-month decrease in revenue was due to the conclusion of a non-recurring clinical trial program in the prior year. Further, and as noted above, 2009 revenues were adversely affected by the economic downturn’s impact on capital spending by hospitals and clinics. Despite this $3.5 million nine-month revenue decline, Angeion experienced an increase in the net loss for the period of only $231,000, or $0.06 per diluted share. The Company was able to achieve this result through improved gross margin (53.0% in 2009 compared to 51.4% in 2008) and decreased operating expense in all categories except research and development which for the nine months ended July 31, 2009, totaled $2.2 million, up $335,000, or 17.7%, from prior-year levels. Exclusive of R&D, year-over-year operating expense fell by $1.7 million, or 16.5%, for the nine-month period. On a pro-forma basis, Angeion reported improved net income sequentially for the fiscal 2009 third quarter. After adding back non-cash charges for depreciation, amortization and stock-based compensation expense, the Company generated $303,000 in pro-forma net income for the quarter. Angeion continues to believe that this pro-forma information is helpful in an analysis of its operating results by eliminating the non-cash items noted in the table below. A reconciliation of GAAP basis net loss to pro-forma net income follows:
As the table indicates, the Company has generated progressively improved results for each of the three quarters of 2009 despite the difficulties posed by the current economic climate. For the nine months ended July 31, 2009, the Company posted pro-forma net income of $403,000. Angeion’s cash flow statement shows that the Company reported $1.0 million in positive operating cash flow in the fiscal 2009 third quarter, due largely to tight working capital management. On a year-to-date basis, Angeion generated $1.6 million in positive operating cash flow. Cash on hand at July 31, 2009, was $10.6 million, up from $9.6 million at the end of second quarter of 2009 and increased from $7.5 million at the end of the third quarter of last year. The Company has no debt. At quarter-end Angeion had $2.56 in cash per outstanding share. Looking Ahead According to Young, strategic partnerships are an important component of the New Leaf health optimization solution. Angeion is working with leading health clubs to deliver New Leaf Active Metabolic Training℠ assessments that create effective exercise and nutrition programs to achieve real results. Additionally the company has partnered with a number of innovative technologies that monitor progress both in real-time and through our eNewLeaf web portal to document compliance and outcomes. Earlier this year, Angeion launched iNewLeaf™ for the iPhone and iPod® Touch to transform it into a fitness monitoring and measurement tracker. Said Young, “Going forward, it is our plan to become a principal player in providing health and wellness solutions by expanding New Leaf’s product and services offering to tackle the growing healthcare crisis.” In the cardiorespiratory diagnostic systems market, Angeion’s sales and marketing efforts remain strong. As recently noted, the company’s MedGraphics brand diagnostic products are in 37 of the top 40 cardiorespiratory medical centers in the United States, according to U.S. News & World Report. Angeion plans to leverage this distinguished list of customers as an entry to other medical centers and hospitals in the United States and around the world. “Despite today’s challenging and competitive environment, we have initiatives in place to ensure we sustain Angeion’s market presence and we will be well positioned when capital budgets are fully reinstated,” said Young. According to Young a number of recent highlights position Angeion well for long-term success.
Concluded Young, “We’re encouraged by the sequential quarter-over-quarter improvements that we’re achieving in our business. Marketplace conditions remain challenging, but we continue to focus on those activities that we can control, including expense management, prudently investing in product innovation and pursuing growth opportunities in our commercial fitness, medical and international markets.” Investor Conference Call About Angeion Corporation The discussion above contains forward-looking statements about Angeion’s future financial results and business prospects that by their nature involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “project,” “intend,” “plan,” “will,” “target,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Our actual results may differ materially depending on a variety of factors including: (1) national and worldwide economic and capital market conditions; (2) continuing cost-containment efforts in our hospital, clinics, and office market; (3) our ability to successfully operate our business, including our ability to develop, improve, and update our cardiorespiratory diagnostic products and successfully sell these products under the MedGraphics and New Leaf brand names into existing and new markets; (4) our ability to maintain our cost structure at a level that is appropriate to our near to mid-term revenue expectations and that will enable us to increase revenues and profitability as opportunities develop; (5) our ability to achieve constant margins for our products and consistent and predictable operating expenses in light of variable revenues from our clinical research customers; (6) our ability to effectively manufacture and ship products in required quantities to meet customer demands; (7) our ability to expand our international revenue through our distribution partners and our Milan, Italy representative branch office; (8) our ability to successfully defend ourselves from product liability claims related to our cardiorespiratory diagnostic products and claims associated with our prior cardiac stimulation products; (9) our ability to defend our intellectual property; (10) our ability to develop and maintain an effective system of internal controls and procedures and disclosure controls and procedures; and (11) our dependence on third-party vendors. Additional information with respect to the risks and uncertainties faced by the Company may be found in, and the above discussion is qualified in its entirety by, the other risk factors that are described from time to time in the Company’s Securities and Exchange Commission reports, including the Annual Report on Form 10-K for the year ended October 31, 2008. Contact: William J. Kullback, SVP & Chief Financial Officer, (651) 766-3492 -- Download Financials --
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