Tuesday February 17, 6:32 am Eastern Time
Company Press Release
EndoSonics Reports Fourth Quarter Results
Also Announces Stock Repurchase Plan
Continuing Divestiture of CCVD Shares
RANCHO CORDOVA, Calif.--(BUSINESS WIRE)--Feb. 17, 1998-- EndoSonics Corporation (NASDAQ:ESON - news), a leading developer and marketer of intravascular ultrasound (IVUS) and functional assessment products, today reported revenue of $10.3 million for its fourth quarter ended December 31, 1997.
This compares with revenue of $6.1 million for the comparable quarter in 1996. For the full year, revenue was $34.0 million versus $24.4 million in 1996.
Excluding the effect of EndoSonics' share of CardioVascular Dynamics' (NASDAQ:CCVD - news) loss, which is reported in EndoSonics' statement of operations, and other special charges, pro forma net income for the quarter ended December 31, 1997 would be $1.0 million, or $0.06 per diluted share, compared with $87,000, or $0.01 per diluted share for the comparable period in 1996.
Including the CCVD loss, net income for the fourth quarter of 1997 was $85,000, or $0.01 per diluted share, versus a loss of $1.2 million, or ($.09) per diluted share for the comparable quarter in 1996.
Excluding the effect of CCVD losses and write-offs of acquired in-process research and development and other charges related to the Company's acquisition of Cardiometrics, pro forma net income for the year would have been $3.2 million, or $0.22 per diluted share, compared with a net loss of $1.3 million, or ($0.10) per diluted share, in 1996.
Including the Company's share of CCVD losses, the write-off and other charges, net loss for the year ended December 31, 1997 was $47.2 million, or ($3.22) per diluted share, compared with a net loss of $7.2 million, or ($0.53) per diluted share, in 1996.
3 Mos. Ended Dec. 31, 12 Mos. Ended Dec. 31,
(Dollars in 000's except
per share amounts) 1997 1996 1997 1996
ESON Pro Forma
Revenue $ 10,271 $ 6,107 $ 33,997 $ 20,539
Net Income (loss)
Before Tax 1,110 87 3,350 (1,339)
Net Income (loss) 973 87 3,175 (1,339)
Per Share $ 0.06 $ 0.01 $ 0.22 ($ 0.10)
ESON Actual
Revenue $ 10,271 $ 6,107 $ 33,997 $ 24,373
Net Income (loss)
Before Tax 222 (1,164) (47,069) (7,163)
Net Income (loss) 85 (1,164) (47,244) (7,163)
Per Share $ 0.01 ($ 0.09) ($ 3.22) ($ 0.53)
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EndoSonics president and CEO, Reinhard Warnking, commented, ''We have made considerable progress during the past year. We believe the acquisition of Cardiometrics gives EndoSonics a more complete suite of tools for the Cath Lab and strengthens our position with physicians worldwide.
''The integration of Cardiometrics was completed ahead of plan and we already are realizing synergies throughout the business. Our all-digital IVUS technology continued to gain acceptance as a result of its superior image quality and enhanced features. We substantially expanded capacity for our Five-64 catheters, which enabled us to meet increasing demand for that product.
''Gross margins were steadily increased through engineering and manufacturing improvements. Finally, we kept tight control of operating expenses during the year and achieved operating profitability for four successive quarters. Our one disappointment during the second half of 1997 was the performance of our primary distribution partner, and we are moving aggressively to improve our total distribution system.''
Separately, EndoSonics also announced today that its board of directors has authorized a stock repurchase program under which the Company may buy back up to $5 million worth of EndoSonics common stock in open market transactions. The repurchases would be retained in the treasury and may be used to fund employee stock purchase and stock option plans.
In addition, the Company announced that during the first quarter of 1998, it had reduced its ownership position in CCVD to approximately 20 percent and expects to reduce its position to less than 20 percent prior to the end of the first quarter.
Following the achievement of these stock sale objectives, EndoSonics will no longer be required to include in its financial results its proportionate share of CCVD's results. EndoSonics anticipates this will start with the second quarter of 1998.
EndoSonics develops, manufactures and markets intravascular ultrasound (IVUS) imaging products and functional assessment products to assist in the diagnosis and treatment of cardiovascular and peripheral vascular disease.
This press release contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements.
For a discussion of factors that might result in different outcomes, see the Company's Form 10K/A and the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on June 13, 1997 and the Form 10-Q for the quarter ended September 30, 1997.
ENDOSONICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
Three months ended 12 Months Ended
December 31, December 31,
(Unaudited) (Audited)
1997 1996 1997 1996
Total revenue $10,271 $6,107 $33,997 $ 24,373
Cost of sales 4,727 3,616 17,962 15,688
Gross profit 5,544 2,491 16,035 8,685
Operating expenses:
Research, development
and clinical 2,428 849 6,309 5,746
Marketing and sales 1,715 914 6,068 5,411
General and administrative 414 1,270 5,840 4,821
Restructuring (375) -- 4,956 518
Acquired in-process
research and development -- -- 43,000 --
Amortization of goodwill 267 -- 475 --
Total operating expenses 4,449 3,033 $66,648 $16,496
Income (loss) from
operations 1,095 (542) (50,613) (7,811)
Equity in net loss of CVD (1,330) (1,251) (2,358) (1,621)
Other income (expense):
Interest income 390 629 1,881 2,269
Gain realized on equity
investment in CVD 67 -- 4,021 --
Total other income 457 629 5,902 2,269
Net income (loss) before
income taxes 222 (1,164) (47,069) (7,163)
Income tax provision 137 -- 175 --
Net income (loss) $85 ($1,164) ($47,244) ($7,163)
Net income (loss) per
share $0.01 ($0.09) ($3.22) ($0.53)
Shares used in the
calculation
of net income
(loss) per share 16,150,951 13,503,739 14,669,975 13,394,728
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