ST. PAUL, Minn.--(BUSINESS WIRE)--Angeion Corporation (NASDAQ: ANGN) today reported results for its fiscal first quarter ended January 31, 2011.
For the 2011 first quarter, Angeion reported revenues of $7.1 million, an increase of 6.6% compared to the prior-year first quarter. Angeion incurred a net loss of ($324,000), or ($0.09) per diluted share, an improvement over the prior-year first quarter net loss of ($826,000), or ($0.20) per diluted share. Excluding a $418,000 first quarter one-time charge related to the CEO transition and separation, Angeion would have realized a profit of $94,000, or $0.02 per diluted share.
Gross margin grew from 50.9% in the prior year quarter to 56.4% in the current quarter due to manufacturing efficiencies as a result of higher sales volume.
Operating expenses for sales and marketing increased $105,000, due to re-assignment of existing personnel from research and development and staff additions to support revenue growth opportunities. General and administrative expenses increased by $266,000 including the $418,000 non-recurring CEO transition expense, which was partially offset by $100,000 in reduced equity based compensation costs. Research and development expenses decreased $278,000 from fiscal 2010 first quarter levels due to personnel re-assignments and reclassification to sales and marketing as well as due to the impact of capitalization of our software-development projects that were expensed during 2010 as part of the product development cycle.
The first fiscal quarter revenues from international operations increased 2.3%, but decreased as a percentage of sales to 27.2%, down from 28.4% for the first fiscal quarter in 2010.
“I was particularly pleased with our first quarter performance following our very strong fiscal 2010 fourth quarter and given that historically, Angeion’s first quarter tends to be our lowest revenue quarter of the year” said Philip I. Smith, Angeion’s President and Chief Executive Officer. “We believe that a modest improvement in general market conditions contributed to our stronger first-quarter sales.”
Smith continued, “Since becoming CEO two months ago, I have focused on strategies to maximize the opportunities in our product portfolio and on ensuring a high-performance management team. We have considerable untapped potential in our MEDGRAPHICS business, in the United States and internationally, as well as in our New Leaf business, focused on consumer fitness, primarily in the United States. My highest priority is to accelerate our plan to take advantage of these opportunities.”
Angeion reported $260,000 in positive operating cash flow in the fiscal 2011 first quarter. This was partly due to the net loss for the period offset by add-backs for depreciation, amortization and stock-based compensation and changes in working capital. Cash generated was used to fund the purchase of property, equipment and intangible assets (including software capitalization) of $173,000. Together with the sale of high grade investments, balance sheet cash increased by $1,386,000 during the quarter. At January 31, 2011, Angeion had no debt and $10.5 million in cash and investments.
Investor Conference Call
Angeion will hold an investment
community conference call today, Wednesday, March 9, 2011, beginning at
4:00 p.m. CST. Philip I. Smith, President and CEO and Larry R. Degen,
Interim CFO, will review first-quarter performance and discuss the
Company’s business. To join the conference call, dial 1-877-941-2332
(International 1-480-629-3723) and provide the conference identification
number 4414440 to the operator.
A replay of the conference call will be available one hour after the call ends through 11:59 p.m. CST on Tuesday, March 15, 2011. To access the replay, dial 1-800-406-7325 (International 1-303-590-3030) and enter passcode: 4414440.
About Angeion Corporation
Founded in 1986, Angeion
Corporation acquired Medical Graphics Corporation in December 1999.
Medical Graphics develops, manufactures and markets non-invasive
cardiorespiratory diagnostic systems that are sold under the MedGraphics
(www.medgraphics.com)
and New Leaf (www.newleaffitness.com)
brand and trade names. These cardiorespiratory diagnostic systems
have a wide range of applications in healthcare as well as health and
fitness The Company’s products are sold internationally through
distributors and in the United States through a direct sales force that
targets heart and lung specialists located in hospitals,
university-based medical centers, medical clinics and physicians’
offices, pharmaceutical companies, medical device manufacturers,
clinical research organizations, health and fitness clubs, personal
training studios, and other exercise facilities. For more information
about Angeion, visit www.angeion.com.
Forward Looking Statements
The discussion above contains
forward-looking statements about Angeion’s future financial results and
business prospects that by their nature involve substantial risks and
uncertainties. You can identify these statements by the use of words
such as “anticipate,” “believe,” “estimate,” “expect,” “project,”
“intend,” “plan,” “will,” “target,” and other words and terms of similar
meaning in connection with any discussion of future operating or
financial performance or business plans or prospects. Our actual results
may differ materially depending on a variety of factors including: (1)
national and worldwide economic and capital market conditions; (2)
continuing cost-containment efforts in our hospital, clinics, and office
market; (3) any changes in the patterns of medical reimbursement that
may result from national healthcare reform; (4) our ability to
successfully operate our business, including successfully converting our
increasing research and development expenditures into new and improved
cardiorespiratory diagnostic products and services and selling these
products and services under the MedGraphics and New Leaf brand names
into existing and new markets; (5) our ability to complete our software
development initiative and migrate our MedGraphics and New Leaf
platforms to a next generation technology; (6) our ability to maintain
our cost structure at a level that is appropriate to our near to
mid-term revenue expectations and that will enable us to increase
revenues and profitability as opportunities develop; (7) our ability to
achieve constant margins for our products and consistent and predictable
operating expenses in light of variable revenues from our clinical
research customers; (8) our ability to expand our international revenue
through our distribution partners and our Milan, Italy representative
branch office; (9) our ability to successfully defend ourselves from
product liability claims related to our cardiorespiratory diagnostic
products and claims associated with our prior cardiac stimulation
products; (10) our ability to defend our existing intellectual property
and obtain protection for intellectual property we develop in the
future; (11) our ability to develop and maintain an effective system of
internal controls and procedures and disclosure controls and procedures;
(12) our dependence on third-party vendors and (13) the ability of new
members of our senior management to make a successful transition into
their new roles and for all members of senior management to ultimately
develop and implement a strategic plan. Additional information with
respect to the risks and uncertainties faced by the Company may be found
in, and the above discussion is qualified in its entirety by, the other
risk factors that are described from time to time in the Company’s
Securities and Exchange Commission reports, including the Annual Report
on Form 10-K for the year ended October 31, 2010.
| ANGEION CORPORATION AND SUBSIDIARIES | ||||||||||
| Consolidated Statements of Operations | ||||||||||
|
(Unaudited, in thousands except per share data) |
||||||||||
| Three Months Ended | ||||||||||
| January 31, | ||||||||||
| 2011 | 2010 | |||||||||
| Revenues | ||||||||||
| Equipment and supply sales | $ | 6,144 | $ | 5,790 | ||||||
| Service revenues | 909 | 825 | ||||||||
| 7,053 | 6,615 | |||||||||
| Cost of revenues | ||||||||||
| Cost of equipment and supplies | 2,922 | 3,151 | ||||||||
| Cost of service revenue | 150 | 97 | ||||||||
| 3,072 | 3,248 | |||||||||
| Gross margin | 3,981 | 3,367 | ||||||||
| Operating expenses: | ||||||||||
| Selling and marketing | 2,047 | 1,942 | ||||||||
| General and administrative | 1,368 | 1,102 | ||||||||
| Research and development | 761 | 1,039 | ||||||||
| Amortization of intangibles | 105 | 105 | ||||||||
| 4,281 | 4,188 | |||||||||
| Operating loss | (300 | ) | (821 | ) | ||||||
| Other expense | (22 | ) | - | |||||||
| Interest income | 8 | 3 | ||||||||
| Loss before taxes | (314 | ) | (818 | ) | ||||||
| Provision for taxes | 10 | 8 | ||||||||
| Net loss | $ | (324 | ) | $ | (826 | ) | ||||
| Net loss per share: | ||||||||||
| Basic | $ | (0.09 | ) | $ | (0.20 | ) | ||||
| Diluted | $ | (0.09 | ) | $ | (0.20 | ) | ||||
| Weighted average common shares outstanding: | ||||||||||
| Basic | 3,754 | 4,153 | ||||||||
| Diluted | 3,754 | 4,153 | ||||||||
| ANGEION CORPORATION AND SUBSIDIARIES | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| January 31, 2011 and October 31, 2010 | ||||||||||
|
(In thousands except share and per share data) |
||||||||||
| January 31, | October 31, | |||||||||
| 2011 | 2010 | |||||||||
| ASSETS | (unaudited) | |||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | $ | 8,329 | $ | 6,943 | ||||||
| Short-term investments | 1,721 | 2,721 | ||||||||
| Accounts receivable, net of allowance for doubtful accounts of | ||||||||||
| $90 and $100, respectively | 4,751 | 5,221 | ||||||||
| Inventories, net of obsolescence reserve of $574 and $599, | ||||||||||
| respectively | 3,767 | 3,697 | ||||||||
| Prepaid expenses and other current assets | 175 | 270 | ||||||||
| Total Current Assets | 18,743 | 18,852 | ||||||||
| Noncurrent investments | 484 | 722 | ||||||||
| Property and equipment, net of accumulated depreciation of | ||||||||||
| $3,572 and $3,650, respectively | 520 | 528 | ||||||||
| Intangible assets, net | 1,269 | 1,279 | ||||||||
| Total Assets | $ | 21,016 | $ | 21,381 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current Liabilities: | ||||||||||
| Accounts payable | $ | 1,868 | $ | 1,951 | ||||||
| Employee compensation | 2,246 | 2,115 | ||||||||
| Deferred income | 1,509 | 1,522 | ||||||||
| Warranty reserve | 140 | 175 | ||||||||
| Other current liabilities and accrued expenses | 320 | 408 | ||||||||
| Total Current Liabilities | 6,083 | 6,171 | ||||||||
| Long-term Liabilities: | ||||||||||
| Long-term deferred income and other | 825 | 873 | ||||||||
| Total Liabilities | 6,908 | 7,044 | ||||||||
| Commitments and Contingencies | - | - | ||||||||
| Shareholders’ Equity: | ||||||||||
| Common Stock, $0.10 par value, authorized 25,000,000 shares, | ||||||||||
| 3,860,142 and 3,862,113 shares issued and 3,764,926 and | ||||||||||
| 3,747,454 shares outstanding in 2011 and 2010, respectively | 376 | 375 | ||||||||
| Additional paid-in capital | 20,579 | 20,486 | ||||||||
| Accumulated deficit | (6,855 | ) | (6,531 | ) | ||||||
| Accumulated other comprehensive income | 8 | 7 | ||||||||
| Total Shareholders’ Equity | 14,108 | 14,337 | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | 21,016 | $ | 21,381 | ||||||
| ANGEION CORPORATION AND SUBSIDIARIES | ||||||||||
| Consolidated Statements of Cash Flows | ||||||||||
|
(Unaudited, in thousands) |
||||||||||
| Three Months Ended | ||||||||||
| January 31, | ||||||||||
| 2011 | 2010 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net loss | $ | (324 | ) | $ | (826 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by | ||||||||||
| operating activities: | ||||||||||
| Depreciation and amortization | 169 | 195 | ||||||||
| Stock-based compensation | 34 | 222 | ||||||||
| Decrease in allowance for doubtful accounts | (10 | ) | 21 | |||||||
| Increase in inventory obsolescence reserve | (25 | ) | 79 | |||||||
| Loss on disposal of equipment | 22 | - | ||||||||
| Change in operating assets and liabilities: | ||||||||||
| Accounts receivable | 480 | (145 | ) | |||||||
| Inventories | (45 | ) | 238 | |||||||
| Prepaid expenses and other current assets | 95 | 111 | ||||||||
| Accounts payable | (83 | ) | (3 | ) | ||||||
| Employee compensation | 131 | (304 | ) | |||||||
| Deferred income | (61 | ) | (211 | ) | ||||||
| Warranty reserve | (35 | ) | 2 | |||||||
| Other current liabilities and accrued expenses | (88 | ) | (23 | ) | ||||||
| Net cash provided by (used in) operating activities | 260 | (644 | ) | |||||||
| Cash flows from investing activities: | ||||||||||
| Sale of investments | 1,239 | - | ||||||||
| Purchase of property and equipment and intangible assets | (173 | ) | (88 | ) | ||||||
| Net cash provided by (used in) investing activities | 1,066 | (88 | ) | |||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from issuance of common stock under employee | ||||||||||
| stock purchase plan | 12 | 10 | ||||||||
| Proceeds from the exercise of stock options | 48 | 7 | ||||||||
| Net cash provided by financing activities | 60 | 17 | ||||||||
| Net increase (decrease) in cash and cash equivalents | 1,386 | (715 | ) | |||||||
| Cash and cash equivalents at beginning of period | 6,943 | 11,219 | ||||||||
| Cash and cash equivalents at end of period | $ | 8,329 | $ | 10,504 | ||||||