EX-99.1 3 dex991.htm PRESS RELEASE DATED NOVEMBER 5, 2002 PRESS RELEASE DATED NOVEMBER 5, 2002
 
Exhibit 99.1
 
FOR IMMEDIATE RELEASE
 
Contact:
  
Richard E. Davis
   
Chief Financial Officer
   
NMT Medical, Inc.
   
(617) 737-0930
   
red@nmtmedical.com
 
NMT MEDICAL ANNOUNCES THIRD-QUARTER RESULTS
Company Generates Increased Sales of CardioSEAL® and STARFlex®
 
BOSTON, Mass., November 5, 2002 – NMT Medical, Inc. (Nasdaq: NMTI), a leader in designing, developing and marketing minimally invasive solutions for the treatment of cardiac sources of stroke, today announced financial results for the third quarter ended September 30, 2002. CardioSEAL® and STARFlex® cardiac septal repair implant sales for the third quarter were $5.0 million compared with $4.0 million for the third quarter of 2001, representing an increase of approximately 25%. There were no vena cava filter product sales in the current quarter, due to the completion of the transitional manufacturing agreement with Bard, as compared with $2.1 million of vena cava filter sales in the third quarter of 2001. Total revenues from continuing operations for the three months ended September 30, 2002 were $5.1 million compared with $6.2 million for the three months ended September 30, 2001.
 
Income from continuing operations before income taxes for the third quarter of 2002 was $4.1 million, including a one-time $4.0 million gain on sale of product line realized upon the transfer of vena cava filter manufacturing to Bard, compared with $548,000 in the third quarter of 2001. The provision for income taxes of $1.6 million, or approximately 38% of income from continuing operations before taxes for the third quarter of 2002, compares to no provision for income taxes for the third quarter of 2001 due to utilization of tax loss carryforwards. Net income from continuing operations for the third quarter of 2002 was $2.5 million, or $0.21 per share on a diluted basis, compared to $548,000, or $0.05 per share, for the comparable period in 2001.
 
Net income from discontinued operations for the third quarter of 2002 was $4.2 million, or $0.34 per diluted share, which included income from discontinued operations of $145,000 and a gain of $4.0 million from the disposition of the discontinued operation. The gain was comprised of a nominal pre-tax gain on the sale of the Company’s neurosciences business unit, effective July 31, 2002, and a $4.0 million tax benefit attributable to the utilization of capital losses on the sale transaction. This compares to net income from discontinued operations of $42,000 for the third quarter of 2001. Net income, including results from discontinued operations, for the third quarter of 2002 was $6.7 million, or $0.55 per diluted share, compared to $590,000, or $0.05 per diluted share, for the comparable period in 2001.
 

 
CardioSEAL® and STARFlex® sales for the nine months ended September 30, 2002 were $13.8 million compared with $10.6 million for the nine months ended September 30, 2001, representing an increase of approximately 30%. Vena cava filter sales, which were concluded during the second quarter under the Company’s transitional manufacturing agreement with Bard, were $5.2 million for the nine months ended September 30, 2002 compared with $6.9 million for the nine months ended September 30, 2001. Total revenues from continuing operations for the nine months ended September 30, 2002 were $19.4 million compared with $18.0 million for the same period of 2001.
 
Income from continuing operations before income taxes for the nine months ended September 30, 2002 was $5.9 million, including the additional $4.0 million gain on sale of product line mentioned previously, compared with $906,000 for the nine months ended September 30, 2001. The provision for income taxes of $2.3 million, or approximately 38% from continuing operations before taxes for the nine months ended September 30, 2002, compares to no provision for income taxes for the nine months ended September 30, 2001 due to utilization of tax loss carryforwards. Net income from continuing operations for the nine months ended September 30, 2002 was $3.7 million, or $0.30 per share on a diluted basis, compared to $906,000, or $0.08 per share, for the comparable period in 2001.
 
Net income from discontinued operations for the nine months ended September 30, 2002, was $4.4 million, or $0.36 per diluted share, and included income from discontinued operations of $333,000 and a gain of $4.0 million from the disposition of the discontinued operation. The gain was comprised of the nominal pre-tax gain on the sale of the Company’s neurosciences business unit and the $4.0 million tax benefit attributable to the utilization of capital losses. This compares to $297,000, or $0.03 per diluted share, for the comparable period in 2001. Net income, including results from discontinued operations, for the nine months ended September 30, 2002 was $8.0 million, or $0.66 per diluted share, compared to net income of $1.2 million, or $0.11 per diluted share, for the comparable period in 2001.
 
“The third quarter of 2002 was an important transition period for NMT Medical,” stated John E. Ahern, President and Chief Executive Officer. “With the sale of our neurosciences business unit in July, we are now completely focused on emerging, high-growth opportunities for the treatment of cardiac sources of stroke with our proprietary catheter-based technologies. To pursue these opportunities, we are continuing to have ongoing clinical trial design discussions with the Food and Drug Administration (FDA) for a broader PFO stroke indication. We are continuing to work with the FDA to develop the least burdensome clinical trial design with the best chance of clinical success and ultimate PMA approval. During the third quarter, we also achieved record CardioSEAL® and STARFlex® revenues while continuing our shift in focus from the pediatric congenital defect market to the PFO stroke market, where we see greater potential long term.”
 
Vice President and Chief Financial Officer Richard E. Davis said, “During the third quarter, we further enhanced our cash position by selling our neurosciences business unit and continued to tightly manage our expenses and working capital, generating positive cash flow from operations. In addition, we also met our milestone of transferring vena cava filter manufacturing responsibilities to Bard, resulting in the receipt of a payment of $4.0 million. At September 30, 2002, our cash, cash equivalents and marketable securities totaled more than $36.5 million – providing what the Company believes are sufficient resources to fund our core growth, regulatory and clinical initiatives and further product development.”

 
Business Outlook
 
Ahern said, “NMT is taking the lead in breaking new ground in the treatment of cardiac sources of stroke. As part of our ongoing efforts to maintain this leadership position, we will continue to focus on the following areas:
 
 
·
 
increasing investment in our regulatory and clinical studies;
 
 
·
 
continuing to invest in R&D for our technology, while reviewing complementary technologies;
 
 
·
 
investing in our U.S. and European infrastructure to drive our sales growth; and
 
 
·
 
maintaining our strong capital position.
 
We expect to make measurable progress on these fronts in the near-term as we work toward our ultimate goal of building the cardiac sources of stroke opportunity into the next major growth platform in interventional cardiology and maintaining our market share leadership within that opportunity.”
 
Conference Call Reminder
 
Management will conduct a conference call later this morning to review the Company’s results. The conference call will be broadcast live over the Internet today at 10:00 a.m. (ET). Individuals who are interested in listening to the Webcast should log onto the “Investor Relations” section of NMT Medical’s Web site, www.nmtmedical.com, at least 15 minutes prior to the event. The call may also be accessed by dialing (913) 981-5509 prior to the start of the call. For interested individuals unable to join the live conference call, a replay will be available through midnight (ET) on November 11, 2002 at (719) 457-0820 or (888) 203-1112 (Passcode: 736648), or by visiting the Company’s Web site.
 
About NMT Medical, Inc.
 
NMT Medical designs, develops and markets proprietary implant technologies that allow interventional cardiologists to treat cardiac sources of stroke through minimally invasive, catheter-based procedures. The Company also serves the pediatric interventional cardiologist with a broad range of cardiac septal repair implants delivered with nonsurgical catheter techniques. For more information about NMT Medical, please visit www.nmtmedical.com.
 
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements — including statements regarding the expansion of NMT’s cardiovascular business and market opportunities, regulatory approvals for the Company’s products, expansion of the Company’s clinical efforts, and maintenance of its cash position — involve known and unknown risks, uncertainties or other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, but are not limited to, the Company’s ability to develop and commercialize new products, a potential delay in the regulatory process with the Food and Drug Administration, as well as risk factors discussed under the heading “Certain Factors That May Affect Future Results” included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, as amended, and subsequent filings with the Securities and Exchange Commission.

 
NMT Medical, Inc. and Subsidiaries
 
Consolidated Balance Sheets
(Unaudited)
 
    
At
September 30, 2002
     
At
December 31, 2001
  
Assets
                  
Current assets:
                  
Cash and cash equivalents
   
$
20,332,402
 
   
$
7,837,496
 
Marketable securities
   
 
16,323,152
 
   
 
—
 
Receivable from sale of product line
   
 
—
 
   
 
18,500,000
 
Accounts receivable, net of reserves of $265,000 and $566,000, respectively
   
 
2,311,254
 
   
 
2,418,214
 
Inventories
   
 
1,140,189
 
   
 
1,415,769
 
Prepaid expenses and other current assets
   
 
898,910
 
   
 
594,515
 
Assets from discontinued operations
   
 
—
 
   
 
6,401,409
 
    
  
Total current assets
   
 
41,005,907
 
   
 
37,167,403
 
    
  
Property and equipment, at cost:
                  
Laboratory and computer equipment
   
 
1,888,468
 
   
 
1,643,053
 
Leasehold improvements
   
 
1,134,545
 
   
 
1,134,545
 
Equipment under capital lease
   
 
1,188,902
 
   
 
1,188,902
 
Office furniture and equipment
   
 
468,763
 
   
 
376,093
 
    
  
    
 
4,680,678
 
   
 
4,342,593
 
Less—Accumulated depreciation and amortization
   
 
3,646,340
 
   
 
3,252,797
 
    
  
    
 
1,034,338
 
   
 
1,089,796
 
    
  
Other assets
   
 
115,997
 
   
 
176,609
 
    
  
    
$
42,156,242
 
   
$
38,433,808
 
    
  
Liabilities and Stockholders’ Equity
                  
Current liabilities:
                  
Accounts payable
   
$
2,048,483
 
   
$
1,862,205
 
Accrued expenses
   
 
3,541,922
 
   
 
2,538,227
 
Deferred gain
   
 
45,131
 
   
 
3,419,200
 
Deferred income taxes
   
 
—
 
   
 
2,515,000
 
Current portion of debt obligations
   
 
61,921
 
   
 
126,198
 
Liabilities from discontinued operations
   
 
711,412
 
   
 
3,539,000
 
    
  
Total current liabilities
   
 
6,408,869
 
   
 
13,999,830
 
    
  
Long-term debt obligations, net of current portion
   
 
—
 
   
 
31,655
 
    
  
Commitments and Contingencies
                  
Stockholders’ equity:
                  
Common stock, $.001 par value
                  
Authorized—30,000,000 shares
                  
Issued and outstanding—11,665,555 and 11,178,826 shares, respectively
   
 
11,666
 
   
 
11,179
 
Additional paid-in capital
   
 
44,544,148
 
   
 
42,963,993
 
Unrealized gain on marketable securities
   
 
131,000
 
   
 
—
 
Cumulative translation adjustment
   
 
—
 
   
 
(1,591,595
)
Accumulated deficit
   
 
(8,939,441
)
   
 
(16,981,254
)
    
  
Total Stockholders’ Equity
   
 
35,747,373
 
   
 
24,402,323
 
    
  
    
$
42,156,242
 
   
$
38,433,808
 
    
  
 

 
NMT Medical, Inc. and Subsidiaries
 
Consolidated Statements of Operations
(Unaudited)
 
    
For the Three Months Ended September 30,
     
For the Nine Months Ended September 30,
  
    
2002
     
2001
     
2002
     
2001
  
Revenues:
                                    
Product sales
   
$
5,007,307
 
   
$
6,079,412
 
   
$
19,030,260
 
   
$
17,480,790
 
License fees and royalties
   
 
118,434
 
   
 
136,403
 
   
 
323,074
 
   
 
537,549
 
    
  
  
  
    
 
5,125,741
 
   
 
6,215,815
 
   
 
19,353,334
 
   
 
18,018,339
 
    
  
  
  
Costs and Expenses:
                                    
Cost of product sales
   
 
1,417,601
 
   
 
1,970,393
 
   
 
5,263,541
 
   
 
6,006,816
 
Research and development
   
 
1,488,312
 
   
 
949,676
 
   
 
4,243,655
 
   
 
2,915,963
 
General and administrative
   
 
887,101
 
   
 
1,609,900
 
   
 
4,180,647
 
   
 
4,963,064
 
Selling and marketing
   
 
1,439,131
 
   
 
1,014,441
 
   
 
3,863,207
 
   
 
2,720,244
 
Settlement of litigation
   
 
—
 
   
 
—
 
   
 
372,713
 
   
 
—
 
    
  
  
  
    
 
5,232,145
 
   
 
5,544,410
 
   
 
17,923,763
 
   
 
16,606,087
 
    
  
  
  
Gain on sale of product line
   
 
4,000,000
 
   
 
—
 
   
 
4,000,000
 
   
 
—
 
    
  
  
  
Income from operations
   
 
3,893,596
 
   
 
671,405
 
   
 
5,429,571
 
   
 
1,412,252
 
Other Income (Expense):
                                    
Foreign currency transaction gain (loss)
   
 
6,621
 
   
 
3,280
 
   
 
53,922
 
   
 
(15,619
)
Interest expense
   
 
(1,452
)
   
 
(164,100
)
   
 
(7,105
)
   
 
(636,106
)
Interest income
   
 
206,357
 
   
 
37,340
 
   
 
470,038
 
   
 
145,403
 
    
  
  
  
    
 
211,526
 
   
 
(123,480
)
   
 
516,855
 
   
 
(506,322
)
    
  
  
  
Income before income taxes
   
 
4,105,122
 
   
 
547,925
 
   
 
5,946,426
 
   
 
905,930
 
Provision for income taxes
   
 
1,572,000
 
   
 
—
 
   
 
2,278,000
 
   
 
—
 
    
  
  
  
Net income from continuing operations
   
 
2,533,122
 
   
 
547,925
 
   
 
3,668,426
 
   
 
905,930
 
Income from discontinued operations
   
 
145,345
 
   
 
42,000
 
   
 
333,060
 
   
 
297,000
 
Gain on sale of discontinued operations, including income tax benefit of $4,022,000
   
 
4,040,327
 
   
 
—
 
   
 
4,040,327
 
   
 
—
 
    
  
  
  
Net income from discontinued operations
   
 
4,185,672
 
   
 
42,000
 
   
 
4,373,387
 
   
 
297,000
 
    
  
  
  
Net income
   
$
6,718,794
 
   
$
589,925
 
   
$
8,041,813
 
   
$
1,202,930
 
    
  
  
  
Basic net income per common share:
                                    
Continuing operations
   
$
0.22
 
   
$
0.05
 
   
$
0.32
 
   
$
0.08
 
Discontinued operations
   
 
0.36
 
   
 
—
 
   
 
0.38
 
   
 
0.03
 
    
  
  
  
Net income
   
$
0.58
 
   
$
0.05
 
   
$
0.70
 
   
$
0.11
 
    
  
  
  
Diluted net income per common share:
                                    
Continuing operations
   
$
0.21
 
   
$
0.05
 
   
$
0.30
 
   
$
0.08
 
Discontinued operations
   
 
0.34
 
   
 
—
 
   
 
0.36
 
   
 
0.03
 
    
  
  
  
Net income
   
$
0.55
 
   
$
0.05
 
   
$
0.66
 
   
$
0.11
 
    
  
  
  
Weighted average common shares outstanding:
                                    
Basic
   
 
11,619,621
 
   
 
11,005,940
 
   
 
11,490,292
 
   
 
10,980,971
 
    
  
  
  
Diluted
   
 
12,221,692
 
   
 
11,543,678
 
   
 
12,181,617
 
   
 
11,231,557