Cardiovascular Systems Reports Fiscal 2011 Second-Quarter Financial Results
February 02 2011 - 4:05PM
Business Wire
Cardiovascular Systems, Inc. (CSI) (Nasdaq: CSII):
- Financial performance improved
significantly over prior-year second quarter:
- Revenue increased 24 percent to
$18.8 million
- Gross margin rose to 79 percent,
operating expenses declined 7 percent
- Adjusted EBITDA improved to $72,000
from $(4.3) million
- Net loss improved 71 percent to
$(2.0) million, or $(0.13) per share
- Special 510(k) filing for next
generation Orbital PAD System expected in February 2011
- Enrollment of 50 patients for Phase
I of the ORBIT II coronary trial is nearly completed
- Clinical data continues to build,
supporting reproducible safety and efficacy
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 second quarter ended
December 31, 2010.
CSI’s revenue in the second quarter rose to $18.8 million, a
24-percent gain over revenue of $15.1 million in the second quarter
of last fiscal year. Adjusted EBITDA, calculated as loss from
operations, less depreciation and amortization and stock-based
compensation expense, improved by $4.3 million to earnings of
$72,000, as a result of stronger revenue and gross margins, and
reduced operating expenses.
Net loss was $(2.0) million for the quarter, or $(0.13) per
common share, a 71 percent improvement over a $(6.8) million net
loss, or $(0.46) per common share a year earlier. Net loss was
favorably affected by $371,000 of interest and other income from
conversion and valuation changes of the company’s convertible
debt.
David L. Martin, CSI president and chief executive officer,
said, “We made substantial progress toward profitability and
financial independence this quarter, as we continued to balance
revenue growth and spending. We accomplished these gains while
making significant advances in improving the ease-of-use of our
Orbital PAD Systems; expanding the wealth of scientific data on our
products’ safety, efficacy and economic benefits; and moving toward
a coronary application of our device.”
During the quarter, 68 new customers were added — higher than
recent previous quarters as a result of new atherectomy
reimbursement opportunities for non-hospital physician accounts,
and increased demand driven by CSI’s compelling body of data.
Consequently, revenue from reorders was 91 percent of total revenue
compared to 95 percent in the fiscal 2011 first quarter. Important
product transitions to the Diamondback Predator 360° and the
upcoming Stealth 360° Orbital PAD Systems also affected revenue
growth in some existing accounts, but position CSI for expanded
growth in the future.
Gross margin rose to 79 percent from 77 percent in the same
period last year, due to product cost reductions and manufacturing
efficiencies. Operating efficiencies in sales and marketing
contributed to a 7-percent reduction in operating expenses compared
to the year-ago period. The company also received a $488,000 grant
from the Qualifying Therapeutic Discovery Project program; however,
its favorable effect on operating expenses was offset by higher
product development expenses related to timing of the Stealth 360°
project.
In the first six months of fiscal 2011, revenue increased to
$36.9 million, up 22 percent from the same period last fiscal year.
The gross margin improved to 78 percent from 77 percent, while
operating expenses declined 3 percent. Adjusted EBITDA loss
improved by 79 percent to $(1.7) million, while the net loss
improved 52 percent to $(6.3) million, or $(0.40) per common share,
compared to $(13.0) million, or $(0.89) last year.
OPERATING HIGHLIGHTS
Special 510(k) Filing for the Next-Generation Orbital PAD
System Expected in February 2011
CSI expects to file a Special 510(k) with the FDA in February
2011 for the Stealth 360° Orbital PAD System, CSI’s next-generation
device. The electric powered Stealth 360° will greatly improve
physicians’ control and ease-of-use, while reducing the product’s
set-up time and staffing requirements. Stealth 360° also utilizes
the improved crown and shaft design of the recently introduced
Diamondback Predator 360°, which allows removal of a high
percentage of plaque in less time and easy advancement through
difficult occlusions. CSI expects to begin a limited market release
of Stealth 360° during its fiscal 2011 third quarter, subject to
FDA clearance.
According to Martin, “The Stealth 360° electric handle is an
exciting product and reflects our commitment to innovation. The
combination of Stealth’s ease-of-use, with our superior growing
body of clinical and economic data demonstrating the safety,
effectiveness and economic benefit of our unique orbital
technology, sets the stage for significant physician adoption and
revenue growth. Elimination of the controller, the capital
equipment portion of our current system, will reduce future product
cost.”
Phase I Enrollment Nearly Completed in ORBIT II, the Coronary
Pivotal Trial
CSI has nearly completed enrollment of the first 50 patients in
Phase I of the ORBIT II trial, which is evaluating the safety and
effectiveness of the Diamondback 360° in treating calcified
coronary lesions. ORBIT II is expected to enroll a total of 429
patients, subject to FDA review of data from the first 50 cases.
CSI anticipates submitting the results of Phase I to the FDA during
the third quarter of fiscal 2011.
Martin continued, “Our unique orbital technology is especially
effective in treating small vessels with calcified lesions and may
be well suited for a coronary application, potentially sparing many
patients from highly invasive surgery and improving long-term
outcomes. Our ORBIT I coronary feasibility trial provided strong
safety and efficacy data, and we have received positive feedback
from physicians using our technology in ORBIT II.”
Expanding Body of Scientific Data Reinforces Safety, Efficacy
and Economic Feasibility
The CONFIRM II prospective registry has completed enrollment,
bringing the total number of patients studied to date in 11 CSI
studies to nearly 2,500. Preliminary results of CONFIRM II
reinforce the safety of the Predator 360° with its extremely low
rates of procedural events in the most challenging patients.
Key study findings demonstrate the consistency of CSI’s Orbital
PAD systems’ performance and reliability of data:
- Excellent Safety – In preliminary
results of 500 patients and 766 lesions, CONFIRM II showed
extremely low rates of perforations (0.5 percent), bailout stenting
(2.5 percent) and mortality (0 percent). This confirms data
compiled from 10 other CSI studies to date: perforations (0.6
percent), bailout stenting (2.4 percent) and mortality (
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