Angeion Corporation announces financial results for third-quarter fiscal 2009

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Highlights

  • Cash increased to $10.6 million, up $919,000 from the second quarter
  • Gross margin for the quarter rises to 54.4% from 51.6% a year ago
  • Operating expense reduced by $110,000 from prior-year third quarter
  • Pro-forma third-quarter cash basis net income positive at $303,000

Angeion Corporation (NASDAQ: ANGN) today reported results for its fiscal third quarter ended July 31, 2009.

For the 2009 third quarter, Angeion posted a net loss of $173,000, or $0.04 per diluted share, on revenues of $6.2 million. This represents a sequential improvement from a 2009 second-quarter net loss of $225,000, or $0.05 per diluted share, also on revenues of $6.2 million. Compared to the prior year third quarter, which generated net income of $259,000, or $0.06 per diluted share, current-year earnings decreased $432,000, or $0.10 per diluted share, due to a $1.4 million decrease in revenues.

While third quarter 2009 revenues continued to feel the impact of the economic downturn and its on-going pressure on capital spending by hospitals and clinics, the Company was encouraged by a sequential improvement in sales between the second and third quarters of 2009, especially since the fiscal second quarter included three uncommonly large shipments which represented $663,000 of that quarter’s total volume. With respect to the fiscal third quarter, despite not having any atypical shipments such as those noted above, Angeion still delivered sequentially higher revenues for the period, as well as stronger gross margins (54.4% versus 53.2% in the 2009 second quarter).

Third-quarter revenue to international customers represented 20.8% of the total while on a year-to-date basis, international business accounted for 20.7% of total sales.

“Given the ongoing tough global economic conditions and continued pressures on capital spending facing hospitals and physician clinics, we are encouraged by our third-quarter results, achieving sequential quarterly sales gains,” said Rodney A. Young, Angeion’s President and Chief Executive Officer. “In recent quarters we’ve taken definitive actions to: sharply focus on closing each potential account sale; aggressively manage operating expenses; and prioritize new product and business development activities. These initiatives are taking hold and producing positive results. We are on our way to realizing our longer-term growth prospects and executing our strategic priorities to bring a restoration of growth, profitability and shareholder value.”

For the nine months ended July 31, 2009, Angeion reported a net loss of $1.0 million, or $0.25 per diluted share, on revenues of $18.9 million. This compares to a net loss of $789,000, or $0.19 per diluted share, on revenues of $22.4 million for the 2008 nine- month period. Approximately $1.1 million of the 2009 nine-month decrease in revenue was due to the conclusion of a non-recurring clinical trial program in the prior year. Further, and as noted above, 2009 revenues were adversely affected by the economic downturn’s impact on capital spending by hospitals and clinics. Despite this $3.5 million nine-month revenue decline, Angeion experienced an increase in the net loss for the period of only $231,000, or $0.06 per diluted share. The Company was able to achieve this result through improved gross margin (53.0% in 2009 compared to 51.4% in 2008) and decreased operating expense in all categories except research and development which for the nine months ended July 31, 2009, totaled $2.2 million, up $335,000, or 17.7%, from prior-year levels. Exclusive of R&D, year-over-year operating expense fell by $1.7 million, or 16.5%, for the nine-month period.

On a pro-forma basis, Angeion reported improved net income sequentially for the fiscal 2009 third quarter. After adding back non-cash charges for depreciation, amortization and stock-based compensation expense, the Company generated $303,000 in pro-forma net income for the quarter. Angeion continues to believe that this pro-forma information is helpful in an analysis of its operating results by eliminating the non-cash items noted in the table below. A reconciliation of GAAP basis net loss to pro-forma net income follows:

As the table indicates, the Company has generated progressively improved results for each of the three quarters of 2009 despite the difficulties posed by the current economic climate. For the nine months ended July 31, 2009, the Company posted pro-forma net income of $403,000.

Angeion’s cash flow statement shows that the Company reported $1.0 million in positive operating cash flow in the fiscal 2009 third quarter, due largely to tight working capital management. On a year-to-date basis, Angeion generated $1.6 million in positive operating cash flow. Cash on hand at July 31, 2009, was $10.6 million, up from $9.6 million at the end of second quarter of 2009 and increased from $7.5 million at the end of the third quarter of last year. The Company has no debt. At quarter-end Angeion had $2.56 in cash per outstanding share.

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