TETERBORO, N.J., May 15, 2001 (BUSINESS WIRE) -- BEI Medical Systems Company, Inc. (Nasdaq: BMED chart, msgs), reported today that revenues for the fiscal 2001 second quarter ended March 31, 2001, were $40,000 versus $36,000 in the comparable period of fiscal 2000.
The net loss was $1,456,000, or $0.19 per diluted share, compared with a net loss of $1,432,000, or $0.19 per diluted share, in the second quarter of last year, according to Richard W. Turner, president and chief executive officer.
Turner commented, "During the second quarter of fiscal 2001, the company continued to work with the Food and Drug Administration (FDA) to facilitate the FDA's review of the pre-market approval application authorizing the company to market its Hydro ThermAblator(R) (HTA(R)) technology in the United States. On April 20, 2001, the company received this authorization, which marks the completion of an eight-year development and regulatory effort by the company's employees and clinical physicians, supported by the company's board of directors, to bring this important product to the women's healthcare market.
"Additionally, on February 14, 2001, the company completed a private placement of 1,114,485 shares of its Series A Convertible Preferred Stock resulting in gross cash proceeds to the company of $4,179,000. Shares of this preferred stock are initially convertible at any time into an aggregate of 2,228,970 shares of common stock of the company at a conversion price of $1.875, subject to adjustment.
"Financial results for the second quarter of fiscal 2001, while very similar to last year's, reflect lower costs in operations, selling, general and administrative expenses that were offset by higher expenses in research, development and related expenses. These higher expenses were due primarily to a non-cash charge associated with the issuance of warrants pursuant to an amendment to the company's existing HTA royalty agreement to reduce future royalty payments on certain of its HTA treatment disposable components."
Turner continued, "Looking forward, now that we have FDA approval to market the HTA in the United States, we are beginning to implement our plans to distribute this product. We are currently in negotiations with several specialty sales marketing organizations that distribute medical devices to gynecologists to promote and provide support of the HTA in the United States. By working with these specialty organizations of medical sales professionals, we anticipate that the company will establish a network of representatives qualified to sell the HTA to hospitals, outpatient surgical centers and doctors' offices throughout the country. We intend to add a vice president of sales and regional zone sales managers to support these medical sales professionals in the field. Additionally, we are organizing a series of workshops across the country to communicate the medical features and benefits of the HTA in a clinical environment.
"Operationally, we anticipate initial product availability during July 2001. We had avoided building inventory until after we had achieved FDA approval and had agreed on the final claims and labeling for the HTA. We have also initiated a cost-reduction program to reduce the component and assembly costs of both the HTA control unit and the sterile disposable procedure set. We anticipate that these programs will begin to take effect over the next 12 months.
"Finally, the company believes that existing cash will provide adequate funding to meet its minimum capital requirements into the fourth calendar quarter of 2001. However, this plan does not provide for all of the investment in sales and marketing activities that the company believes will be required to successfully commercialize the HTA. The company is currently exploring options to fund operations beyond that period," Turner concluded. |
