Generates $2.7 million in Cash Flow from Operations IRVINE, Calif.,
Oct. 27 /PRNewswire-FirstCall/ -- Endologix, Inc. (NASDAQ: ELGX),
developer of minimally invasive treatments for aortic disorders,
today announced financial results for the three and nine months
ended September 30, 2009. John McDermott, Endologix President and
Chief Executive Officer, said, "Our strong third quarter financial
results were driven by continued sales of new products by our
domestic sales force and better than expected international
revenues. The launch of IntuiTrak(TM) early in 2009 was quite
successful and we have received positive feedback from physicians.
Our sales force is now focused on driving deeper utilization by
physicians that have been introduced to this innovative delivery
system and developing these new relationships into long term
customers. We also continue to gradually expand our sales
organization on schedule." Mr. McDermott continued, "The
international business benefitted from initial product shipments to
China, an earlier than expected limited release of the
IntuiTrak(TM) Delivery System in Europe and continued growth in the
Japanese market. Our European distribution partners were
particularly pleased to begin receiving IntuiTrak(TM), which will
allow them to introduce the device to a select group of leading
physicians ahead of the full product launch in 2010." Financial
Results Total revenue in the third quarter of 2009 was $13.8
million, a 47% increase from $9.4 million in the third quarter of
2008, and a 5% increase from $13.2 million in the second quarter of
2009. Domestic revenue was $11.3 million, a 40% increase compared
with $8.1 million in the third quarter of 2008, and a 1% decrease
compared with $11.4 million in the second quarter of 2009. The
slight sequential decline was the result of a challenging
comparison to the second quarter 2009 that included very strong
growth due to the U.S. market launch of IntuiTrak(TM) and
seasonality during the summer months. International revenue was
$2.5 million, a 91% increase compared with $1.3 million in the
third quarter of 2008 and a 41% sequential increase compared with
$1.8 million in the second quarter of 2009. For the nine months
ended September 30, 2009, total revenue increased 44% to $38.8
million, compared with $27.0 million for the nine months ended
September 30, 2008. Gross profit was $10.1 million in the third
quarter of 2009, representing a gross margin of 73%. This compares
with gross profit of $6.9 million and a gross margin of 74% in the
third quarter of 2008. Lower gross margin for the third quarter of
2009 was a result of a higher contribution from international
revenue in the quarter. Gross profit was $29.0 million for the nine
months ended September 30, 2009, representing a gross margin of
75%. This compares with gross profit of $19.4 million and a gross
margin of 72% for the nine months ended September 30, 2008. Higher
gross margin for the nine months ended September 30, 2009 was
driven by more favorable product mix due to new products and lower
cost of sales due to volume efficiencies. Total operating expenses
were $10.2 million in the third quarter of 2009, compared with $9.9
million in the third quarter of 2008. Marketing and sales expenses
increased to $6.6 million in the third quarter of 2009 from $6.1
million in the same period last year. Research, development and
clinical expenses increased to $1.6 million in the third quarter of
2009 from $1.4 million in the same period last year. General and
administrative expenses decreased to $2.0 million in the third
quarter of 2009 from $2.4 million in the same period last year.
Total operating expenses for the nine months ended September 30,
2009 were $30.6 million, compared with $30.0 million for the nine
months ended September 30, 2008. Marketing and sales expenses
increased to $19.8 million in the first nine months of 2009, up
from $18.0 million in the same period last year. Research,
development and clinical expenses were $4.5 million in the first
nine months of 2009, compared to $4.7 million in the same period
last year. General and administrative expenses decreased to $6.3
million in the first nine months of 2009, down from $7.3 million in
the same period last year. Endologix reported a net loss for the
third quarter of 2009 of $156,000, or $0.00 per share, compared
with a net loss of $3.0 million, or $0.07 per share, for the third
quarter of 2008. For the nine months ended September 30, 2009, the
Company reported a net loss of $1.8 million, or $0.04 per share,
compared with a net loss of $10.4 million, or $0.24 per share, for
the nine months ended September 30, 2008. Total cash and cash
equivalents were $21.1 million as of September 30, 2009, compared
with total cash and cash equivalents of $7.6 million as of December
31, 2008. In August 2009, the Company raised net proceeds of $14.7
million in an underwritten public offering, and in September, made
an unscheduled debt repayment of $4.5 million. "During the third
quarter we continued to improve our balance sheet, generating $2.7
million in positive cash flow from operations and raising net
proceeds of $14.7 million in an underwritten public offering. In
addition, we have paid off our bank debt, putting the Company in a
strong financial position to execute on our growth strategy,"
stated Endologix Chief Financial Officer Bob Krist. Financial
Guidance The Company is re-affirming its full year 2009 guidance of
revenue in the range of $51 to $53 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
(877) 407-0789 from the U.S. or (201) 689-8562 from outside the
U.S. A telephone replay will be available for seven days following
the completion of the call by dialing (877) 660-6853 from the U.S.
or (201) 612-7415 from outside the U.S., and entering account
number 3055 and conference ID number 335438. The conference call
will be broadcast live over the Internet at
http://www.endologix.com/ and will be available for 30 days. About
Endologix Endologix, Inc. develops and manufactures minimally
invasive treatments for aortic disorders. The Company's flagship
product is the Powerlink® System, which is an endovascular stent
graft for the treatment of 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 a leading
cause of death in the U.S. Additional information can be found on
Endologix's Web site at http://www.endologix.com/. Except for
historical information contained herein, this news release contains
forward-looking statements, including with respect to 2009
financial guidance, 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 the success
of sales efforts for the Powerlink System and related new products,
product research and 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, 2008, 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 Nine Months Ended September 30, September 30,
2009 2008 2009 2008 ---- ---- ---- ---- Revenue: Domestic Product
Revenue $11,296 $8,077 $32,882 $22,807 Non - U.S. Product Revenue
2,481 1,297 5,897 4,145 ----- ----- ----- ----- Total Product
Revenue: 13,777 9,374 38,779 26,952 License revenue -- 9 -- 33 ---
--- --- --- Total revenue 13,777 9,383 38,779 26,985 Cost of
product revenue 3,659 2,460 9,820 7,545 ----- ----- ----- -----
Gross profit 10,118 6,923 28,959 19,440 ------ ----- ------ ------
Gross profit as a % of total revenue 73% 74% 75% 72% Operating
expenses: Research, development and clinical 1,630 1,412 4,454
4,708 Marketing and sales 6,591 6,073 19,783 18,017 General and
administrative 2,019 2,399 6,347 7,270 ----- ----- ----- -----
Total operating expenses 10,240 9,884 30,584 29,995 ------ -----
------ ------ Loss from operations (122) (2,961) (1,625) (10,555)
----- ------- ------- -------- Other income: Other (34) (1) (133)
139 ---- --- ----- --- Net loss $(156) $(2,962) $(1,758) $(10,416)
===== ======= ======= ======== Basic and diluted net loss per share
$(0.00) $(0.07) $(0.04) $(0.24) ====== ====== ====== ====== Shares
used in computing basic and diluted net loss per share 46,220
43,124 44,316 43,018 ====== ====== ====== ====== ENDOLOGIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (In thousands)
September 30, December 31, 2009 2008 ------------ ------------
ASSETS Current assets: Cash and cash equivalents $21,078 $7,611
Restricted cash equivalents 500 500 Accounts receivable, net 8,340
6,371 Other receivables 2 3 Inventories 6,139 7,099 Other current
assets 462 443 --- --- Total current assets 36,521 22,027 Property
and equipment, net 2,281 2,993 Goodwill 4,631 4,631 Intangibles,
net 6,455 7,508 Other assets 126 104 --- --- Total Assets $50,014
$37,263 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable and accrued expenses $6,607
$5,401 Current portion of long term debt 78 750 -- --- Current
liabilities 6,685 6,151 Long term liabilities: Long term debt 103
4,250 Other long term liabilities 1,029 1,045 ----- ----- Long term
liabilities 1,132 5,295 ----- ----- Total liabilities 7,817 11,446
----- ------ Stockholders' equity: Common stock, $.001 par value;
75,000 shares authorized, 48,947 and 44,365 shares issued, and
48,452 and 43,870 outstanding 49 44 Additional paid-in capital
188,301 170,239 Accumulated deficit (145,488) (143,730) Treasury
stock at cost, 495 shares (661) (661) Accumulated other
comprehensive income (4) (75) --- ---- Total stockholders' equity
42,197 25,817 ------ ------ Total Liabilities and Stockholders'
Equity $50,014 $37,263 ======= ======= COMPANY CONTACT: INVESTOR
CONTACTS: Endologix, Inc. The Ruth Group John McDermott, CEO Nick
Laudico (646) 536-7030 (949) 595-7200 Zack Kubow (646) 536-7020
http://www.endologix.com/ DATASOURCE: Endologix, Inc. CONTACT: John
McDermott, CEO, Endologix, Inc., +1-949-595-7200; or Investors,
Nick Laudico, +1-646-536-7030, or Zack Kubow, +1-646-536-7020, both
of The Ruth Group Web Site: http://www.endologix.com/
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