LANGHORNE, Pa., May 13, 2009 (GLOBE NEWSWIRE) -- Power Medical Interventions(r), Inc. (Nasdaq:PMII), a leader in developing and commercializing Intelligent Surgical Instruments(tm), today announced financial results for the first quarter ended March 31, 2009. The company also highlighted several corporate milestones that were achieved since the completion of the fourth quarter of 2008.
Corporate Milestones:
* Power Medical Interventions (PMI) continued to increase sales and
improve operating results in the first quarter of 2009. The company
reported:
-- A 16 percent increase in sales during the first quarter of
2009 as compared to fourth quarter of 2008, and a 23 percent
increase in sales compared to the first quarter of 2008.
-- Excluding the impact of a charge for obsolete inventory, an 8
percent improvement in gross margin to 28 percent of sales in
the first quarter of 2009, compared to a gross margin of 20
percent during the fourth quarter of 2008. A 29 percent
improvement in gross margin to 28 percent of sales in the
first quarter of 2009, compared to a gross margin of (1
percent) during the same period in 2008, exclusive of charges
for obsolete inventory recorded in both periods.
-- A 25 percent decrease in operating expenses during the first
quarter of 2009 as compared to the fourth quarter of 2008,
and a 39 percent decrease in operating expenses as compared
to the first quarter of 2008.
* PMI announced that the U.S. Food and Drug Administration (FDA)
cleared its 510(k) application for marketing its patented i60R
Intelligent Surgical Instrument. The i60R Intelligent Surgical
Instrument, the world's first reverse pivot linear cutter, is
designed to improve surgical outcomes by providing surgeons with
greater access to important anatomical sites that are currently
difficult to reach interoperatively. The i60R will be available
for applications throughout the digestive tract.
* PMI announced the receipt of a $2.5 million milestone payment from
Intuitive Surgical. In September 2008, PMI entered into a License
and Development Agreement with Intuitive to jointly develop a novel
surgical stapling device that will attach to Intuitive's da Vinci
(r) Surgical System. To date, PMI has made significant progress
relating to this collaboration, triggering this milestone payment.
* PMI announced that surgeons in Japan used the company's instruments
to successfully remove a gastric submucosal tumor (SMT) through a
patient's vagina. This novel procedure, known as a transvaginal
NOTES (Natural Orifice Translumenal Endoscopic Surgery) partial
gastrectomy, was the fourth ever of its kind. Unlike traditional
and laparoscopic surgeries, PMI's iNOLC (Intelligent Natural
Orifice Linear Cutter) and i60XXL (Articulating Endoscopic Linear
Cutter) instruments enabled these operations to be performed with
only two minor abdominal incisions. As a result, all four patients
had tumors successfully removed while experiencing minimal
postoperative pain, requiring no medication and being able to walk
the day following surgery.
* Subsequent to the quarter end, PMI announced that it has filed a 510
(k) application with the FDA requesting marketing clearance for the
company's iDrive Intelligent Power Unit (tm) (IPU) , detachable
Intelligent Surgical Instruments and iConsole(tm) monitor. The iDrive
IPU is a novel hand-held, computer-controlled power unit to which
any of the company's Intelligent Surgical Instruments can be
attached, offering surgeons a broad range of cutting and stapling
configurations. The iConsole is a proprietary wireless device that
communicates directly with the iDrive IPU during surgical
procedures and provides auditory and visual feedback that allows
surgeons to make real-time, critical decisions that may ultimately
lead to improved patient outcomes. The company plans to launch the
iDrive and iConsole products once 510(k) clearance to market is
received from the FDA.
"PMI continued its track toward profitability during the first quarter of 2009. We believe that we have built an infrastructure that will support achievement of that goal. As our core competencies have matured, our quality has improved dramatically. Increasingly, surgeons and hospitals are discovering what we have previously communicated, that PMI's proprietary computer mediated Intelligent Surgical Instruments enable new procedures, facilitate ease of use in existing procedures, are cost effective, and reduce medical waste. Our technologies provide significant value to the hospital, surgeon, patient, and environment. We continue to make meaningful improvements in our operations, increase revenue, support new surgical applications with our innovative instruments and make great strides in our collaboration with Intuitive Surgical," stated Michael Whitman, chief executive officer of Power Medical Interventions. "These achievements clearly illustrate PMI's effective execution of its business plan. In the coming months, we expect to launch our i60R cutter, iDrive Intelligent Power Unit and the iConsole monitor. We look forward to strengthening our current sales and operating trends with the commercialization of these cutting-edge products."
Financial Results
Sales in the three months ended March 31, 2009 were $2.7 million, compared with $2.2 million during the corresponding period in 2008, an increase of 23 percent. Reload revenue, which is a key driver of the company's revenue model, was approximately $1.3 million in the first quarter of 2009, compared to $0.5 million in the first quarter of 2008.
The company's gross margin was $0.6 million, or 21 percent of sales, in the three months ended March 31, 2009, compared to a gross margin of ($0.3 million), or (15 percent) of sales, during the corresponding period in 2008. The increase in gross margin for the three months ended March 31, 2009 reflects improvements in the company's manufacturing process including the use of the Reload Automation machine implemented in the second half of 2008. During the three months ended March 31, 2009 and 2008, the company incurred inventory obsolescence charges of $179,000 and $301,000, respectively.
Total operating expenses in the three months ended March 31, 2009 decreased by 39 percent to $6.9 million from $11.4 million during the corresponding period in 2008. First quarter 2009 sales and marketing expenses decreased 49 percent to $3.5 million from $6.8 million during the first quarter of 2008. Research and development expenses for the first quarter of 2009 also decreased 49 percent to $0.8 million from $1.6 million in the corresponding 2008 period. General and administrative expenses for the first quarter of 2009 decreased 13 percent to $2.6 million from $3.0 million in the corresponding period of 2008. These reductions are largely a result of the restructuring plan the company implemented in the fourth quarter of 2008.
Net loss applicable to common shares for the three months ended March 31, 2009 was $6.9 million, or $(0.41) per basic and diluted share, compared to net loss applicable to common shares of $12.2 million, or $(0.71) per basic and diluted share, for the corresponding period in 2008.
The company's unrestricted cash and cash equivalents balance as of March 31, 2009 was approximately $4.7 million compared to $8.4 million as of December 31, 2008.
Outlook
PMI needs to raise additional capital and is actively pursuing initiatives to raise additional funds through license and development agreements with corporate partners or public and private offerings of securities, including debt or equity financings. The company expects the results of such efforts will have a material impact on financial results for 2009.
Conference Call
PMI management will host a conference call and webcast today at 5:00 p.m. Eastern to discuss the company's financial results and provide an update on recent corporate developments. Conference call details are as follows:
Date: May 13, 2009
Time: 5:00 p.m. Eastern
U.S. dial-in number: 877-857-6147
International dial-in number: 719-325-4841
Additionally, a live webcast of the call will be available on PMI's web site at www.pmi2.com. The webcast will be archived through Wednesday, May 27, 2009.
A replay of the conference call can also be accessed through Wednesday, May 27, 2009, by dialing 888-203-1112 in the U.S. and 719-457-0820 internationally, and entering the following access code: 7140720.
About PMI's Intelligent Surgical Instruments(tm)
PMI's Intelligent Surgical Instruments are computer-assisted, power-actuated endomechanical instruments that surgeons use for cutting, stapling and tissue manipulation in a variety of procedures in open surgery and minimally invasive surgery. The company believes that compared to conventional endomechanical devices, its Intelligent Surgical Instruments offer greater precision and consistency, superior compressive force, improved access to anatomical sites and enhanced ease of use.
About Power Medical Interventions, Inc.
Power Medical Interventions is the world's only provider of computer-assisted, power-actuated surgical cutting and stapling products. PMI's state-of-the-art wireless Intelligent Surgical Instruments are revolutionizing and expanding minimally invasive surgery applications and enabling novel surgical procedures to benefit surgeons, patients, hospitals and healthcare networks. To learn more about Power Medical Interventions, Inc. and its products, please visit www.pmi2.com.
Safe Harbor Statement
Statements included in this press release, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements relating to the future financial performance of the Company are subject to many factors including, but not limited to, the Company's inability to raise additional capital; the possibility of incurring additional losses in the foreseeable future; the inability of the Company's products to achieve broad market acceptance; the Company's inability to further identify, develop and achieve commercial success for new products and technologies; the Company's difficulty in increasing production to provide customers with adequate supply; the Company's inability to improve gross margins; loss of the Company's key suppliers; the Company's inability to manage continued growth; inability to remediate the Company's internal weakness over financial reporting and achieve and maintain effective internal control over financial reporting; failure in the Company's training efforts; the risk of product liability claims connected with the use of the Company's products; adverse effects or risks relating to the Company's sales in international markets; the Company's inability to meet the requirements for continued listing on the NASDAQ Capital Market; the Company's inability to comply with the covenants of its 7% Senior Convertible Secured Notes; the Company's inability to satisfy the requirements of the FDA and other regulatory agencies; loss of key personnel; lack of third party coverage and reimbursement for the Company's products; risk of loss of the Company's key manufacturing facility, and other risks detailed in the Company's Securities and Exchange Commission filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2008.
Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. When used in this press release the terms "anticipate," "believe," "estimate," "expect," "may," "objective," "plan," "possible," "potential," "project," "will" and similar expressions identify forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof, and the Company does not undertake any obligation to update any forward-looking statements, whether as a result of future events, new information or otherwise.
Power Medical Interventions, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
March 31, December 31,
2009 2008
------------ ------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 4,713 $ 8,384
Restricted cash -- 875
Accounts receivable, net of allowance for
doubt accounts 1,736 1,290
Inventory 7,536 8,354
Prepaid expenses and other current assets 1,040 1,487
------------ ------------
Total current assets 15,025 20,390
Property and equipment, net 4,106 4,380
Intangibles, net 1,207 1,192
Deferred financing fees 567 709
Other assets 209 223
Restricted cash 1,118 1,303
------------ ------------
Total assets $ 22,232 $ 28,197
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,556 $ 2,661
Accrued expenses 3,154 4,039
Long term debt, current portion 24,840 71
------------ ------------
Total current liabilities 29,550 6,771
Long-term debt, net of current portion 196 24,921
Deferred revenue, long-term 15,000 12,500
Deferred rent, net of current portion 443 493
------------ ------------
Total liabilities 45,189 44,685
Commitments and contingencies
Stockholders' deficit:
Common stock, $.001 par value,
200,000,000 shares authorized,
17,152,465 shares issued and
outstanding, as of each respective
period 17 17
Additional paid-in capital 200,266 199,740
Accumulated other comprehensive loss (68) (20)
Accumulated deficit (223,172) (216,225)
------------ ------------
Total stockholders' deficit (22,957) (16,488)
------------ ------------
Total liabilities and stockholders'
deficit $ 22,232 $ 28,197
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Power Medical Interventions, Inc.
Consolidated Statements of Operation (unaudited)
(Amounts in thousands, except share and per share data)
For the Three Months
Ended March 31,
2009 2008
------------ ------------
Sales $ 2,743 $ 2,224
Cost of Sales 2,161 2,557
------------ ------------
582 (333)
Costs and expenses
Research and development 804 1,583
Sales and marketing 3,494 6,796
General and administrative 2,625 3,013
------------ ------------
6,923 11,392
------------ ------------
Operating loss (6,341) (11,725)
Other income (expense)
Interest and other income 44 195
Interest and other expense (650) (650)
------------ ------------
Total other income (expense) (606) (455)
------------ ------------
Net loss $ (6,947) $ (12,180)
============ ============
Net loss per common stock share:
- Basic and diluted $ (0.41) $ (0.71)
============ ============
Weighted average number of common stock
shares outstanding:
- Basic and diluted 17,152,465 17,107,052
============ ============