Endologix, Inc. (Nasdaq: ELGX), developer and manufacturer of the
Powerlink� System endoluminal stent graft (ELG) for the minimally
invasive treatment of abdominal aortic aneurysms (AAA), today
announced financial results for the three months ended March 31,
2007. �We are reporting another quarter of solid revenue growth as
Powerlink System sales increased 134% year-over-year and 37%
sequentially. We are also announcing our ninth consecutive quarter
of domestic sales growth, and are encouraged by the increasing
usage of the Powerlink System by U.S. physicians,� said Endologix
President and Chief Executive Officer Paul McCormick.
�Additionally, we are making progress with product enhancements
that simplify the procedure even for patients with complex
anatomies,� he added. �To this end, we are exceptionally pleased to
report the initial successful implantations of the Powerlink
endoluminal stent graft incorporating our new Visiflex SurePass
Delivery System�. This next-generation system provides physicians
with additional confidence, particularly when treating patients
with complex iliac anatomies.� First Quarter Financial Results
Total product revenue in the first quarter of 2007 was $6.3
million, a 134% increase from $2.7 million in the first quarter of
2006 and a 37% increase from $4.6 million in the fourth quarter of
2006. Domestic product revenue increased by 142% to $5.1 million,
compared with $2.1 million in the 2006 first quarter, and by 25%
sequentially from $4.1 million in the 2006 fourth quarter.
International product revenue of $1.1 million for the first quarter
of 2007 more than doubled from both $559,000 during the comparable
quarter last year and $456,000 in the fourth quarter of 2006. Part
of this latter increase was driven by stocking orders from our new
distributor for most of Europe, LeMaitre Vascular, Inc. Gross
profit of $3.7 million was 59% of revenue in the first quarter of
2007. This compares with $1.6 million and 59%, respectively, in the
first quarter of 2006. The cost impact from the higher purchase
price of a key raw material component was offset by the stronger
mix of direct U.S. commercial sales which generate higher average
selling prices, compared with international sales made to
distributors. Total operating expenses were $8.4 million in the
first quarter of 2007, versus $5.9 million in the first quarter of
2006. The increase reflects the almost doubling of the domestic
sales force which fueled the 142% increase in domestic sales
between those periods. Consequently, marketing and sales expenses
increased to $5.2 million in the first quarter of 2007 from $2.6
million in the comparable quarter last year. Research, development
and clinical expenses for the first three months of 2007 were $1.6
million versus $1.7 million last year, and general and
administrative expenses were $1.6 million, unchanged from $1.6
million last year. Operating expenses in the first quarter of 2007
included $460,000 of stock based compensation, compared with
$348,000 in the first quarter of 2006. Endologix reported a net
loss for the first quarter of 2007 of $4.4 million, or $0.10 per
share, compared with net a loss of $4.1 million, or $0.11 per
share, for the first quarter of 2006. The net loss for the first
quarter of 2007 included $513,000, or $0.01 per share, for stock
based compensation expense. This compares to $348,000, or $0.01 per
share for stock based compensation expense, in the first quarter of
2006. Total cash and marketable securities at March 31, 2007 were
$15.3 million, compared with total cash and marketable securities
as of December 31, 2006 of $20.2 million. Conference Call
Information Endologix management will host a conference call to
discuss these topics today beginning at 5:00 p.m. Eastern time
(2:00 p.m. Pacific Time). To participate via telephone please call
(888) 463-4487 from the U.S. or (706) 634-5615 from outside the
U.S. A telephone replay will be available for two days following
the completion of the call by dialing (800) 642-1687 from the U.S.
or (706) 645-9291 from outside the U.S., and entering reservation
number 5519157. The conference call will be broadcast live over the
internet at www.endologix.com and will be available for 14 days.
About Endologix Endologix, Inc. develops and manufactures minimally
invasive treatments for vascular diseases. Endologix's Powerlink
System is an endoluminal stent graft for treating abdominal aortic
aneurysms (AAA). AAA is a weakening of the wall of the aorta, the
largest artery in the body, resulting in a balloon-like
enlargement. Once AAA develops, it continues to enlarge and, if
left untreated, becomes increasingly susceptible to rupture. The
overall patient mortality rate for ruptured AAA is approximately
75%, making it the thirteenth leading cause of death in the U.S. In
October 2004, Endologix received approval to market the Powerlink
System in the U.S. Additional information can be found on
Endologix�s Web site at www.endologix.com. Except for historical
information contained herein, this news release contains
forward-looking statements, the accuracy of which are necessarily
subject to risks and uncertainties, all of which are difficult or
impossible to predict accurately and many of which are beyond the
control of Endologix. Many factors may cause actual results to
differ materially from anticipated results including sales efforts,
product development efforts, and other economic, business,
competitive and regulatory factors. The Company undertakes no
obligation to update its forward-looking statements. Please refer
to the Company�s Annual Report on Form 10-K for the year ended
December 31, 2006, and the company�s other filings with the
Securities and Exchange Commission, for more detailed information
regarding these risks and other factors that may cause actual
results to differ materially from those expressed or implied.
ENDOLOGIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS �
(In thousands, except per share amounts) (Unaudited) � Three Months
Ended March 31, 2007� 2006� Revenue: Domestic Product Revenue
$5,117� $2,116� Non � U.S. Product Revenue 1,133� 559� Total
Product Revenue: 6,250� 2,675� License revenue 58� 58� Total
revenue 6,308� 2,733� Cost of product revenue 2,579� 1,119� Gross
profit $3,729� $1,614� Gross profit as a % of total revenue 59% 59%
Operating expenses: Research, development and clinical $1,604�
$1,687� Marketing and sales 5,192� 2,598� General and
administrative 1,621� 1,601� Total operating expenses 8,417� 5,886�
Loss from operations $(4,688) $(4,272) Other income: Interest
income 248� 160� Total other 248� 160� Net loss ($4,440) ($4,112)
Basic and diluted net loss per share ($0.10) ($0.11) Shares used in
computing basic and diluted net loss per share 42,704� 36,476�
ENDOLOGIX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS � (In
thousands, except per share amounts) (Unaudited) � March 31, 2007
December 31, 2006 ASSETS Current assets: Cash and cash equivalents
$10,449� $6,271� Restricted cash equivalents 500� 500� Marketable
securities available-for-sale 4,369� 12,217� Accounts receivable,
net 3,834� 2,763� Other receivables 110� 198� Inventories 9,484�
9,356� Other current assets 404� 637� Total current assets 29,150�
31,942� Property and equipment, net 4,402� 4,516� Marketable
securities available-for-sale --� 1,200� Goodwill 4,631� 4,631�
Intangibles, net 9,967� 10,319� Other assets 78� 78� Total Assets
$48,228� $52,686� LIABILITIES AND STOCKHOLDERS� EQUITY Current
liabilities: Accounts payable and accrued expenses $4,259� $5,009�
Current liabilities 4,259� 5,009� Long-term liabilities 1,156�
1,172� Total liabilities 5,415� 6,181� � Stockholders� equity:
Common stock, $.001 par value; 60,000,000 shares authorized, and
43,217,000 and 43,144,000 shares issued, and 42,722,000 and
42,649,000 outstanding � 43� � 43� Additional paid-in capital
164,444� 163,698� Accumulated deficit (121,103) (116,663) Treasury
stock at cost, 495,000 (661) (661) Accumulated other comprehensive
income 90� 88� Total stockholders� equity 42,813� 46,505� Total
Liabilities and Stockholders� Equity $48,228� $52,686�
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