Power Medical Interventions, Inc. Reports 2007 Financial Results
AP
Posted: 2008-02-27 16:41:24
By PRIME NEWSWIRE
LANGHORNE, Pa., Feb. 27, 2008 (PRIME NEWSWIRE) -- Power Medical Interventions(r), Inc. (Nasdaq:PMII), a leader in developing and commercializing Intelligent Surgical Instruments(tm), today announced financial results for the fourth quarter and twelve months ended December 31, 2007.
Financial Results
Sales in the three months ended December 31, 2007 were $1.9 million compared with $1.8 million during the corresponding period in 2006. Included in the fourth quarter 2007 amount was approximately $270,000 of revenue attributable to sales of reload cartridges for the company's new i60 wireless hand-held linear stapler. Sales in the twelve months ended December 31, 2007 were $7.8 million compared with $7.9 million in 2006.
The company's gross margin improved to (9.2%) of sales in the three months ended December 31, 2007 from a gross margin of (70.4%) during the corresponding period in 2006. Gross margin in the twelve months ended December 31, 2007 improved to 14.5% of sales from a gross margin of (27.7%) in 2006. The 2007 gross margin improvements reflect the benefits of switching from contract manufacturing to self manufacturing for certain company products, increased efficiencies of the company's manufacturing operations and lower charges for inventory obsolescence in 2007.
Total operating expenses in the three months ended December 31, 2007 increased by 88% to $14.1 million from $7.5 million during the corresponding period in 2006. Total operating expenses in the twelve months ended December 31, 2007 increased by 41% to $35.9 million compared with $25.4 million during the corresponding period in 2006. Fourth quarter 2007 domestic and international sales and marketing expenses increased to $8.6 million from $4.1 million during the fourth quarter of 2006 due to the planned rapid increase of the company's domestic sales force and associated sales commissions and recruiting costs. In addition, the company incurred approximately $1.2 million of sales sample expense in the fourth quarter of 2007 associated with placing the recently FDA approved i60 and iDrive hand pieces with the larger sales force. Research and development expenses for the fourth quarter of 2007 increased 41% to $1.8 million from $1.3 million in the corresponding 2006 period due to increased investment in product line extensions and product derivatives, component costs associated with the iDrive as well as increased headcount. General and administrative expenses for the fourth quarter of 2007 increased 70% to $3.6 million from $2.1 million in the corresponding period of 2006. The increase is the result of non-cash compensation expense of approximately $614,000 associated with option grants to employees and increased costs associated with the company being public.
Net loss applicable to common shareholders for the three months ended December 31, 2007 was $15.5 million, or $(1.21) per basic and diluted share, compared to net loss applicable to common shareholders of $11.1 million or $(2.96) per basic and diluted share for the corresponding period in 2006. Net loss applicable to common shareholders for the year ended December 31, 2007 was $44.4 million, or $(7.34) per basic and diluted share, compared to $35.4 million net loss applicable to common shareholders or $(9.44) per basic and diluted share for 2006. The company's unrestricted cash and cash equivalents balance as of December 31, 2007 was approximately $36.6 million.
Michael Whitman, Founder, President and Chief Executive Officer, commented, "2007 was a transition year for Power Medical as we achieved several significant milestones which have placed the company firmly at the forefront of technology development in the minimally invasive surgery marketplace. With the FDA marketing clearance of the i60 Intelligent Surgical Instrument(tm) and iDrive, we moved our technology from a tethered platform to a wireless platform; we continued our transition from contract manufacturing to self manufacturing of key products; and the successful completion of our IPO signaled our transition from a private to a public company which enables us to enter 2008 in a strong position to deliver sales growth and improved operating performance."
Mr. Whitman continued, "Our fourth quarter 2007 results reflect our continued investment in our infrastructure to advance the market penetration of our Intelligent Surgical Instruments. We have received favorable feedback from the surgeon community on the benefits of our i60 platform, despite some unanticipated challenges associated with the launch of our green reloads.
On a separate note, we have made significant progress on our product line extensions. We expect to launch our i45B&G in the second quarter of 2008. We are also excited about the upcoming launch of our vascular Intelligent Surgical Instruments. We will launch i45V, our first Intelligent Surgical Instrument for use on pulmonary arteries and veins and other vascular structures throughout the circulatory system. We will also launch our i60RB4 which is designed specifically for use in Cardiovascular surgery for the occlusion of the heart's left atrial appendage. We are actively working to expand our product offering through line extensions and product derivatives. A number of these product derivatives will be utilized in emerging clinical applications."
Outlook
The company currently expects sales for 2008 to be in the range of $29 to $33 million and anticipates a loss from operations in 2008 of $23 to $25 million. A significant portion of the revenue growth is expected in the third and fourth quarters of 2008, as the company places more instruments with hospital accounts and reload firings increase
