LANGHORNE, Pa., March 4, 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 fourth quarter and the year ended December 31, 2008. The company also highlighted several corporate milestones that were achieved since the completion of the third quarter of 2008:
Corporate Milestones:
* Power Medical Interventions (PMI) continued to improve its
financial results in the fourth quarter and second half of 2008.
The company reported:
-- A 23 percent increase in fourth quarter 2008 sales as compared
to fourth quarter 2007. A 5 percent increase in sales in the
second half of 2008, compared to the first half of 2008.
-- A 29 percent improvement in gross margin to 20 percent of sales
in the fourth quarter of 2008, compared to a gross margin of
(9 percent) during the corresponding period in 2007. A
49 percent improvement in gross margin to 22 percent of sales in
the second half of 2008, compared to a gross margin of
(27 percent) during the first half of 2008.
-- A 35 percent decrease in operating expenses during the fourth
quarter of 2008 as compared to the fourth quarter of 2007 and a
14 percent decrease in operating expenses during the second half
of 2008 as compared to the first half of 2008.
* PMI appointed two seasoned industry executives to manage the
company's finance and sales and marketing functions:
-- Brian Posner, appointed chief financial officer, joined PMI with
more than 20 years in global finance positions in the healthcare
industry. Most recently, Mr. Posner served as executive vice
president and chief financial officer at Pharmacopeia, Inc., a
public clinical development-stage biopharmaceutical company,
where he was responsible for all elements of finance and
accounting and successfully secured multiple rounds of financing.
-- Joe Camaratta, appointed senior vice president global sales and
marketing, joined PMI following 25 years at Siemens Medical
Solutions in the U.S. and Germany. Mr. Camaratta most recently
held the position of vice president of global solutions, in
which he was responsible for a business unit dedicated to
performance improvement services to hospital and integrated
delivery network clients.
* Subsequent to the quarter end, PMI announced that the U.S. Food and
Drug Administration had cleared its 510(k) application for
marketing its patented i60R Intelligent Surgical Instrument. The
i60R Intelligent Surgical Instrument is the world's first reverse
pivot linear cutter, 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. The company intends to launch the product in the second
quarter of 2009.
* PMI made significant progress with its efforts relating to the
company's License and Development Agreement with Intuitive Surgical
signed in September 2008. Subsequent to the quarter end, PMI
announced the receipt of a $2.5 million payment from Intuitive.
"2008 was an important year for PMI, marked by the rapid maturation and improvement of our operations spanning manufacturing, product development, commercialization and internal systems," stated Michael Whitman, chief executive officer of Power Medical Interventions. "While PMI had numerous significant achievements in 2008, the three most significant of the year were the launch of PMI's Intelligent Surgical Instruments(tm) (ISI) platform, the signing of our License and Development and Reload Supply Agreements with Intuitive Surgical, and the completion of our Reload Automation Machine."
Financial Results
Sales in the three months ended December 31, 2008, were $2.4 million, compared with $1.9 million during the corresponding period in 2007, 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 fourth quarter of 2008, compared to $948,000 in the third quarter of 2008, a sequential increase of 33 percent. Sales in the year ended December 31, 2008, were $9.0 million compared with $7.8 million in 2007, an increase of 15 percent. Sales for 2008 may have been higher had it not been for the delayed regulatory approval of the Intelligent Surgical Instruments in Japan, the world's second largest stapling market, which the company expected in the fourth quarter of 2008.
The company's gross margin was $466,000 or 20 percent of sales in the three months ended December 31, 2008, compared to a gross margin of ($176,000) or (9 percent) of sales during the corresponding period in 2007. Gross margin for the year ended December 31, 2008, decreased to ($185,000) or (2 percent) of sales from a gross margin of $1.1 million or 15 percent of sales in 2007. The decrease in gross margin for the year ended December 31, 2008, reflects increased costs incurred during the first half of 2008 associated with the write-off of obsolete inventory as a result of the transition to the new Intelligent Surgical Instruments platform, and increased costs relating to engineering samples used for validation testing. The company's gross margin as a percentage of sales was at least 20 percent in each of the last two quarters of 2008.
Total operating expenses in the three months ended December 31, 2008, decreased by 35 percent to $9.2 million from $14.1 million during the corresponding period in 2007. During the fourth quarter of 2008, the company announced a corporate restructuring whereby the company incurred a non-recurring charge of $469,000. Total operating expenses in the year ended December 31, 2008, increased by 11 percent to $39.9 million, compared with $35.9 million during the corresponding period in 2007. Fourth quarter 2008 sales and marketing expenses decreased 43 percent to $4.9 million from $8.6 million during the fourth quarter of 2007. Research and development expenses for the fourth quarter of 2008 decreased 31 percent to $1.3 million from $1.8 million in the corresponding 2007 period. General and administrative expenses for the fourth quarter of 2008 decreased 30 percent to $2.5 million from $3.6 million in the corresponding period of 2007.
Net loss applicable to common shares for the three months ended December 31, 2008, was $9.4 million, or $(0.55) per basic and diluted share, compared to net loss applicable to common shares of $15.5 million, or $(1.21) per basic and diluted share, for the corresponding period in 2007. Net loss applicable to common shares for the year ended December 31, 2008, was $42.3 million, or $(2.47) per basic and diluted share, compared to net loss applicable to common shares of $44.4 million, or $(7.34) per basic and diluted share, for the corresponding period in 2007.
The company's unrestricted cash and cash equivalents balance as of December 31, 2008, was approximately $8.4 million compared to $15.9 million as of September 30, 2008. This cash balance does not reflect the latest payment of $2.5 million from Intuitive Surgical that PMI received in the first quarter of 2009.
Mr. Whitman commented, "Given the challenging financial environment, we are pleased with the results achieved in the fourth quarter, including an increase in revenue, gross margin improvement and a reduction in operating expenses. The successful completion of raising additional capital will allow management to focus on three important objectives: 1. Increase sales globally; 2. Expand clinical indications for our instruments; and 3. Maximize our opportunity with Intuitive Surgical as the exclusive worldwide supplier of reloads for the world's first robotic stapling instrument that will be attached to Intuitive's da Vinci(r) Surgical System."
Outlook
PMI is currently evaluating strategic financing options with the intent of providing the company with additional working capital. The company expects the results of such efforts will have a material impact on financial guidance for 2009.
Conference Call
PMI management will host a conference call and webcast today at 4:30 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: March 4, 2009
Time: 4:30 p.m. Eastern
U.S. dial-in number: 877-718-5111
International dial-in number: 719-325-4771
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, March 18, 2009.
A replay of the conference call can also be accessed through Wednesday, March 18, 2009, by dialing 888-203-1112 in the U.S. and 719-457-0820 internationally, and entering the following access code: 3841869.
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(r), Inc. is the world's only provider of computer-assisted, power-actuated surgical stapling products. PMI's Intelligent Surgical Instruments(tm) enable less invasive surgical techniques to benefit surgeons, patients, hospitals and healthcare networks. PMI manufactures durable recyclable technology to reduce medical waste and help keep the planet clean. The company was founded in 1999, and is headquartered in Langhorne, PA with additional offices in Germany, France, and Japan. 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 customer acceptance of the products in the market, the introduction of competitive products and product development, commercialization and technological difficulties, 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, 2007 and its Quarterly Report on Form 10-Q for the three months ended September 30, 2008.
Such statements are based upon the current beliefs and expectations of the company's management and are subject to significant risks and uncertainties including, but not limited to, costs and delays in the development and/or FDA or other regulatory approval of our products; our inability or failure to achieve development milestones; our inability to maintain or enter into, and the risks resulting from our collaboration or contractual arrangements for development of our products; our inability to protect patents or proprietary rights; the availability of required financing and other sources of funds on acceptable terms, if at all; general economic conditions; and government regulation. 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 we do 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
December 31, December 31,
2008 2007
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 8,384,408 $ 36,592,220
Restricted cash 875,000 1,750,000
Accounts receivable less allowance of
$99,000 and $120,000 in 2008 and 2007,
respectively 1,289,683 1,514,776
Inventory 8,353,993 7,371,205
Prepaid expenses and other current
assets 1,487,310 1,178,493
------------- -------------
Total current assets 20,390,394 48,406,694
Property and equipment, net 4,379,390 4,713,010
Intangible assets, net 1,191,944 965,303
Deferred financing fees 708,894 1,276,010
Other assets 223,040 261,862
Restricted cash, long term 1,302,912 2,350,071
------------- -------------
Total assets $ 28,196,574 $ 57,972,950
============= =============
Liabilities and shareholders' equity
(deficit)
Current liabilities:
Accounts payable $ 2,661,175 $ 4,422,198
Accrued expenses 4,038,946 4,506,748
Current portion of long-term debt 71,158 69,230
------------- -------------
Total current liabilities 6,771,279 8,998,176
Long-term debt, net of current portion 24,920,793 24,742,891
Deferred revenue 12,500,000 --
Deferred rent, net of current portion 492,324 691,873
------------- -------------
Total liabilities 44,684,396 34,432,940
Shareholders' equity (deficit)
Common stock, $.001 par value:
Authorized shares-200,000,000 at
December 31, 2008 and December 31, 2007
respectively; issued and outstanding
17,152,465 and 17,107,052 at
December 31, 2008 and December 31,
2007, respectively 17,153 17,107
Additional paid-in capital 199,740,243 197,733,981
Accumulated other comprehensive loss (20,392) (300,184)
Accumulated deficit (216,224,826) (173,910,894)
------------- -------------
Total shareholders' equity (deficit) (16,487,822) 23,540,010
------------- -------------
Total liabilities and shareholders'
equity (deficit) $ 28,196,574 $ 57,972,950
============= =============
Power Medical Interventions, Inc.
Consolidated Statements of Operations
Three Months Ended
December 31, Year Ended December 31,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Sales $ 2,367,465 $ 1,918,311 $ 8,993,713 $ 7,812,055
Cost of sales 1,901,643 2,094,261 9,178,233 6,675,598
------------ ------------ ------------ ------------
465,822 (175,950) (184,520) 1,136,457
Costs and
expenses:
Research and
development 1,266,660 1,835,100 5,896,331 6,208,962
Sales and
marketing 4,940,217 8,615,173 22,802,575 19,703,140
General and
administrative 2,522,350 3,628,281 10,736,480 9,959,390
Restructuring
charge 468,739 -- 468,739 --
------------ ------------ ------------ ------------
9,197,966 14,078,554 39,904,125 35,871,492
------------ ------------ ------------ ------------
Operating loss (8,732,144) (14,254,504) (40,088,645) (34,735,035)
Other income
(expense):
Interest
income 26,229 302,121 368,797 866,173
Interest
expense (649,009) (799,648) (2,594,084) (2,975,996)
------------ ------------ ------------ ------------
Total other
income
(expense) (622,780) (497,527) (2,225,287) (2,109,823)
------------ ------------ ------------ ------------
Net loss (9,354,924) (14,752,031) (42,313,932) (36,844,858)
Accretion of
preferred
stock -- (755,862) -- (7,549,776)
------------ ------------ ------------ ------------
Net loss
applicable to
common shares $ (9,354,924) $(15,507,893) $(42,313,932) $(44,394,634)
============ ============ ============ ============
Net loss per
common share:
Basic and
diluted $ (0.55) $ (1.21) $ (2.47) $ (7.34)
============ ============ ============ ============
Weighted
average number
of common
shares
outstanding:
Basic and
diluted 17,124,622 12,868,241 17,116,418 6,047,699
============ ============ ============ ============
Power Medical Interventions, Inc.
Selected Financial Data
Six Months
Six Months ended Year Ended
ended December 31, December 31,
June 30, 2008 2008 2008
-------------- -------------- --------------
Sales $ 4,383,610 $ 4,610,103 $ 8,993,713
Cost of sales $ 5,575,414 $ 3,602,819 $ 9,178,233
Gross margin $ (1,191,804) $ 1,007,284 $ (184,520)
Gross margin % (27%) 22% (2%)
Operating expenses $ 21,483,473 $ 18,420,652 $ 39,904,125 *
Operating loss $ (22,675,277) $ (17,413,368) $ (40,088,645)
Net decrease in
cash and cash
equivalents $ (24,982,112) $ (3,225,700)** $ (28,207,812)**
*Includes fourth quarter restructuring charge of $468,739
**Includes receipt of $12,500,000 upfront payment from Intutitive
Surgical in September 2008