Cardiovascular Systems Reports Fiscal 2011 First-Quarter Financial Results

Cardiovascular Systems, Inc. (CSI) (Nasdaq: CSII):

Financial performance improved significantly over prior year’s first quarter
- Revenue increased 20 percent to $18.2 million
- Operating expenses remained consistent with prior-year levels
- Adjusted EBITDA loss improved 51 percent to $(1.7) million
- Net loss improved 31 percent to $(4.3) million, or $(0.28) per share
Scientific evidence continues to build, with over 1,700 patients studied
Over 33,000 patients have been treated to date

Cardiovascular Systems, Inc. (CSI) (Nasdaq: CSII), a medical device company developing and commercializing innovative interventional treatment systems for vascular disease, today reported financial results for its fiscal first quarter ended September 30, 2010.

CSI’s revenue in the first quarter rose to $18.2 million, a 20 percent gain over revenue of $15.2 million in the first quarter of last fiscal year. Adjusted EBITDA, calculated as loss from operations, less depreciation and amortization and stock-based compensation expense, improved by 51 percent to a loss of $(1.7) million, as a result of stronger revenue and minimal operating expense growth.

Net loss was $(4.3) million for the quarter, a 31 percent improvement over a $(6.2) million net loss in the first quarter of last year. Net loss per common share was $(0.28) in the fiscal 2011 first quarter, compared to $(0.43) per common share a year earlier.

David L. Martin, CSI president and chief executive officer, said, “We continued our quarterly progress toward profitability. Our primary goals are profitability and positive cash flow, proliferation of the Diamondback 360® as the first-line treatment for peripheral arterial disease, and approval of a coronary application for the Diamondback System.”

Revenue generated from customer reorders rose to 95 percent of total revenue for the fiscal 2011 first quarter, up from 92 percent in last year’s first quarter. Gross margin at 77 percent was consistent with the same period last year, and in line with CSI’s expectations. Operating efficiencies and cost management held operating expenses to only a 2 percent increase at $17.9 million, including $500,000 of net expenses related to a legal settlement with ev3.

OPERATING HIGHLIGHTS

PAD Clinical Studies Continue to Progress

At a scientific symposium in September, data from three CSI peripheral arterial disease (PAD) clinical studies reinforced the advantages of the Diamondback 360°. These studies – CALCIUM 360°, CONFIRM Diamondback and CLEAR 360° – added to CSI’s unprecedented wealth of scientific data demonstrating the superior safety, efficacy and cost effectiveness of the Diamondback 360° System. In 10 studies to date, over 1,700 patients have been studied by 250 physicians in 220 hospitals. Many of these patients are the most difficult to treat and would have been excluded from other studies due to the severity of their conditions, including lesions with calcified plaque and disease in small arterial vessels. Some key findings from these studies include: