Cardiovascular Systems, Inc. (CSI) (Nasdaq: CSII), a medical
device company developing and commercializing innovative
interventional treatment systems for vascular disease, today
announced preliminary revenue of approximately $18.7 million for
the fiscal 2012 first quarter ended September 30, 2011, compared
with $18.2 million in the first quarter of fiscal 2011.
The fiscal 2012 first-quarter net loss is expected to be in the
range of $(3.9) million to $(4.2) million, or $(0.22) to $(0.24)
per common share, including approximately $(400,000), or $(0.02)
per common share, of expenses related to conversion and valuation
changes of convertible debt. Net loss was $(4.3) million, or
$(0.28) per common share, in the fiscal 2011 first quarter.
CSI’s first-quarter results are preliminary and subject to the
company’s management and independent auditors completing their
customary quarterly review procedures.
David L. Martin, CSI president and chief executive officer,
commented, “After five consecutive quarters of double-digit revenue
growth, CSI’s growth slowed in the fiscal 2012 first quarter and
was below our guidance. While we are still reviewing the results,
we believe several factors disrupted growth in the short-term, but
will lead to higher revenue growth in the future.”
The following factors affected first-quarter fiscal 2012 revenue
growth:
- PAD (peripheral
arterial disease) procedures are shifting from hospitals to
physician office-based labs. This transition is expected to
increase the number of PAD procedures performed in the future. In
the short-term, however, hospital-based procedures and related
purchases are decreasing. Purchases in the new office-based labs
are lagging, due to the time dedicated to open those facilities and
to limited cash resources that constrain their inventory levels.
Sales to these labs are also highly competitive, which extends
selling cycles.
- Customer demand
for conversion to the Stealth 360° PAD System was stronger than
expected. The Stealth 360° customer base grew more than 120
percent to 240 accounts in the just-completed quarter. This higher
demand consumed selling time, as sales professionals installed the
new device in accounts, and reduced purchases in the short-term, as
customers transitioned inventory between product lines. The Stealth
360° also has significantly fewer crown configurations, reducing
the number of devices the customer needs to have in inventory.
- Significant
changes are under way in sales and marketing. With the May
2011 addition of Kevin Kenny as executive vice president of sales
and marketing, many important changes to the sales and marketing
organization and programs are in progress. These changes are
necessary to build a foundation for higher growth in the future,
but can be disruptive initially.
- A general decline
in PAD procedures occurred. Typically, PAD surgical
procedures slow down in the summer months. Several sources indicate
that the decline was more significant in 2011. While CSI does not
believe this was a major cause for the lower revenue in the
quarter, it likely heightened the effect of the other factors
identified.
Martin continued, “We believe the sluggish first-quarter revenue
growth is temporary, and we expect double-digit revenue growth for
the full fiscal year. In fact, revenue in the month of September
improved significantly as the short-term effect of these factors
began to subside, growing 14 percent over September 2010. We remain
confident that the strength of our Stealth 360° in an underserved
PAD market, supported by unprecedented clinical data demonstrating
its excellent safety and effectiveness, will result in attractive,
sustainable growth over the long term.”
CSI will update fiscal 2012 guidance and provide guidance for
second quarter of fiscal 2012 during its first-quarter earnings
announcement, expected to be in early November.
Conference Call Today at 3:45 p.m. CT (4:45 p.m. ET)
Cardiovascular Systems, Inc. will host a live conference call
and webcast to discuss this announcement today, October 6, 2011, at
3:45 p.m. CT (4:45 p.m. ET). To access the call, dial (888)
679-8034 and enter access number 95870696. Please dial in at least
10 minutes prior to the call and wait for assistance, or dial “0”
for the operator. To listen to the live webcast, go to the investor
information section of the company’s website, www.csi360.com, and click on the webcast icon. A
webcast replay will be available beginning at 7 p.m. CT the same
day.
For an audio replay of the conference call, dial (888) 286-8010
and enter access number 24154395. The audio replay will be
available beginning at 8 p.m. CT on Thursday, October 6, 2011,
through 6 p.m. CT on Saturday, October 8, 2011.
About Peripheral Arterial Disease
As many as 12 million Americans, most over age 65, suffer from
PAD, which is caused by the accumulation of plaque in peripheral
arteries (commonly the pelvis or leg) reducing blood flow. Symptoms
include leg pain when walking or at rest. Left untreated, PAD can
lead to severe pain, immobility, non-healing wounds and eventually
limb amputation. With risk factors such as diabetes and obesity on
the rise, the prevalence of PAD is growing at double-digit
rates.
Millions of patients with PAD may benefit from treatment with
the Stealth 360° and Diamondback 360°, minimally invasive catheter
systems developed and manufactured by CSI. These systems use a
diamond-coated crown, attached to a guide wire, which sands away
plaque while preserving healthy vessel tissue, or medial integrity
— a critical factor in preventing reoccurrences. Balloon
angioplasty and stents have significant shortcomings in treating
hard, calcified lesions. Stents are prone to fractures and high
recurrence rates, and treatment of hard, calcified lesions often
leads to vessel damage and suboptimal results.
About Cardiovascular Systems, Inc.
Cardiovascular Systems, Inc., based in St. Paul, Minn., is a
medical device company focused on developing and commercializing
innovative solutions for treating vascular and coronary disease.
The company’s Stealth 360°™, Diamondback 360® and Predator 360® PAD
Systems treat calcified and fibrotic plaque in arterial vessels
throughout the leg in a few minutes of treatment time, and address
many of the limitations associated with existing surgical, catheter
and pharmacological treatment alternatives. The U.S. FDA granted
510(k) clearance for the use of the Diamondback 360° in August 2007
and for the Stealth 360° in March 2011. To date, more than 55,000
PAD procedures have been performed using the Diamondback 360° and
Stealth 360° in leading institutions across the United States.
CSI has also commenced its ORBIT II Investigational Device
Exemption clinical trial to evaluate the safety and effectiveness
of its orbital technology in treating coronary arteries. The
coronary system is limited by federal law to investigational use
and is currently not commercially available in the United
States.
For more information, visit the company’s website at
www.csi360.com.
Safe Harbor
Certain statements in this news release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 and are provided under the protection of the
safe harbor for forward-looking statements provided by that Act.
For example, statements in this press release regarding (i)
preliminary financial results and expectations for the fiscal 2012
net loss; (ii) belief that transitional factors disrupting growth
in the short term will result in higher revenue growth in the
future; (iii) the shift in procedures from hospitals to
office-based labs and its effect on the number of PAD procedures in
the short term and in the future; (iv) changes in the sales and
marketing organization and programs that create the foundation for
higher growth in the future; (v) the expectation that the low
revenue growth this quarter is temporary and will recover for the
remainder of this year; and (vi) attractive, sustainable growth
over the long term and double-digit revenue growth for the full
year of fiscal 2012, are forward-looking statements. These
statements involve risks and uncertainties which could cause
results to differ materially from those projected, including but
not limited to quarterly review procedures; the potential for
unanticipated delays in enrolling medical centers and patients for
clinical trials; dependence on market growth; the reluctance of
physicians to accept new products; the effectiveness of the Stealth
360°; actual clinical trial results; the impact of competitive
products and pricing; the difficulty to successfully manage
operating costs; fluctuations in quarterly results; FDA clearances
and approvals; approval of products for reimbursement and the level
of reimbursement; general economic conditions and other factors
detailed from time to time in CSI’s SEC reports, including its most
recent annual report on Form 10-K and subsequent quarterly reports
on Form 10-Q. CSI encourages you to consider all of these risks,
uncertainties and other factors carefully in evaluating the
forward-looking statements contained in this release. As a result
of these matters, changes in facts, assumptions not being realized
or other circumstances, CSI's actual results may differ materially
from the expected results discussed in the forward-looking
statements contained in this release. The forward-looking
statements made in this release are made only as of the date of
this release, and CSI undertakes no obligation to update them to
reflect subsequent events or circumstances.
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