exv99w1
Exhibit 99.1
CARDIOVASCULAR SYSTEMS REPORTS FISCAL 2011
THIRD-QUARTER FINANCIAL RESULTS
Conference Call Scheduled for Today, May 4, 2011, at 3:45 PM CT (4:45 PM ET)
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Financial performance rose significantly over prior-year third quarter: |
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Revenues increased 22 percent to $20.2 million |
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Gross profit margin rose to 80 percent, operating expenses declined 3 percent |
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Adjusted EBITDA improved 87 percent to a loss of $(495,000) |
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Net loss improved 63 percent to $(2.4) million, or $(0.15) per share |
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Early Stealth 360° results demonstrate easy set-up; hands-on physician control; and one
minute treatment time, with the same proven safety profile as Diamondback 360° |
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Superior COMPLIANCE 360° acute results over balloon angioplasty, show a 360 percent
higher procedural success rate and 91 percent less bailout stenting, with a p value <
0.0001 |
St. Paul, Minn., May 4, 2011 Cardiovascular Systems, Inc. (CSI) (Nasdaq: CSII), a medical device
company developing and commercializing innovative interventional treatment systems for vascular
disease, today reported financial results for its fiscal third quarter ended March 31, 2011.
CSIs revenues in the third quarter rose to $20.2 million, a 22-percent gain over revenue of $16.5
million in the third quarter of last fiscal year. Adjusted EBITDA, calculated as loss from
operations, less depreciation and amortization and stock-based compensation expense, was a loss of
$(495,000), a $3.4 million improvement driven by stronger revenue and gross margins, and reduced
operating expenses.
Net loss was $(2.4) million for the quarter, a 63-percent improvement over a $(6.5) million net
loss in the third quarter of last year. Net loss per common share was $(0.15) in the fiscal 2011
third quarter, compared to $(0.44) per common share a year earlier.
David L. Martin, CSI president and chief executive officer, commented, In the third quarter, we
stayed on course with strong revenue growth and a marked improvement in profitability as
productivity gains and cost efficiencies held SG&A expenses flat with last years third quarter.
Revenue from customer reorders remained high and usage rates in our targeted accounts rose
substantially both clear indications that physicians are seeing the advantages of our therapy in
treating peripheral arterial disease (PAD) and adopting it in their practices. The combination of
our orbital PAD systems ease-of-use and an expanding body of scientifically sound clinical data
supporting their safety and effectiveness, is leading to revenue growth.
During the quarter, we also announced two exciting developments related to products and our robust
clinical trial program. We received FDA marketing clearance for our Stealth 360° Orbital PAD
System and began a limited market release, which is generating impressive physician feedback on the
products ease of use and effectiveness. At the recent American College of Cardiology meeting, data
from our
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 2
COMPLIANCE 360°clinical trial showed strong, superior acute patient outcomes and excellent safety
in above-the-knee procedures using our orbital PAD system compared to high-pressure balloon
angioplasty treatment.
Revenue from customer reorders rose to 94 percent of total revenue for the fiscal 2011 third
quarter, up from 93 percent in last years third quarter. Gross profit margin rose to 80 percent
from 77 percent in the same period last year, primarily due to continued product cost reductions
and manufacturing efficiencies. Lower product development expenses, including reduced stock
compensation from stock award forfeitures and estimated refundable state R&D tax credits,
contributed to a 3-percent decrease in operating expenses compared to the year-ago period.
In the first nine months of fiscal 2011, revenues increased to $57.1 million, up 22 percent from
the same period a year ago. The gross profit margin improved to 79 percent from 77 percent, while
operating expenses declined 3 percent. Adjusted EBITDA loss improved by 82 percent to $(2.2)
million, while the net loss improved 56 percent to $(8.6) million, or $(0.55) per common share,
compared to a net loss of $(19.5) million, or $(1.33) last year.
Operating Highlights
510(k) Marketing Clearance for Stealth 360° Received; Limited Release in Progress
In March, CSI received FDA 510(k) marketing clearance for the Stealth 360° Orbital PAD System and
initiated a limited market release. The Stealth 360° offers a simpler design with power and speed
controls on the handle that gives physicians hands-on control device operation. Stealth is as easy
to set up as a balloon or stent and utilizes CSIs proven orbital mechanism of action that protects
healthy tissue while removing even the most difficult to treat plaque throughout the entire leg.
Martin noted: Initial physician users have been impressed by the Stealth 360°s enhanced control
and ease of use, simple set-up and smooth performance in safely treating the entire leg. In these
accounts, we are seeing significant increases in device usage, including additional physicians who
are new to our products. These encouraging early results support our belief that the Stealth 360°,
combined with our growing wealth of clinical evidence, will be a game-changer in the future
treatment of PAD.
CSI is introducing the Stealth 360° through a limited market release to generate valuable feedback
from physicians and establish best practices for device operation. This limited release is expected
to continue through the first quarter of fiscal 2012, ending September 30, 2011, after which CSI
plans to begin a broader commercial launch.
Compliance 360° Study Demonstrates Efficacy, Safety in Above-the-Knee Procedures
Acute data from the prospective, randomized COMPLIANCE 360° clinical trial was presented at the
American College of Cardiology meeting in early April. The study directly compared the Diamondback
360® Orbital PAD System versus balloon angioplasty in treating above-the-knee PAD.
COMPLIANCE 360° acute results showed that the Diamondback 360° can achieve far superior acute
results in treating calcium-containing plaque by improving lesion compliance through differential
sanding, without the need for stent placement. Data showed the Diamondback 360° achieved better
luminal gain and improved lesion compliance, with a 360-percent higher procedural success rate than
high-pressure balloon angioplasty and 91 percent less bailout stenting. The Diamondbacks unique
differential sanding safely removes calcified plaque, reducing the need for high-pressure balloon
angioplasty and stenting.
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 3
Martin said, The acute results of this study provide a clear indication of the superior safety and
effectiveness of treatments using our Diamondback 360° systems compared to high-pressure balloon
angioplasty. We are definitely raising the standard of care for PAD patients.
The COMPLIANCE 360° study enrolled 50 patients at nine U.S. sites. Patients will have clinical
follow up at one, six and 12 months. Longer-term results will be reported as they become available.
Fiscal 2011 Fourth-Quarter Outlook
Management anticipates that the transition to the Stealth 360° product line, which began a limited
market release in March 2011, will limit the rate of revenue growth until a broader commercial
launch begins. While revenue growth is anticipated, at this point CSI does not expect to achieve
the level of revenue necessary to reach profitability in the fourth quarter of fiscal 2011.
For the fiscal 2011 fourth quarter ending June 30, 2011, CSI anticipates:
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Revenue in the range of $21.0 million to $22.0 million, or growth of 17 percent to 22
percent over the fourth quarter of fiscal 2010; |
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Gross profit as a percentage of revenue at approximately the same level as the fiscal 2011
third quarter; |
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Total operating expenses similar to the fiscal 2011 third quarter; |
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Interest and other expense of about $(350,000), excluding the potential effect of
conversions or valuation changes of convertible debt; |
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Net loss in the range of $(0.8) million to $(1.4) million, or loss per common share ranging
from $(0.05) to $(0.09), assuming 16.2 million average shares outstanding; and |
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Adjusted EBITDA earnings between $1.0 million and $0.4 million. |
Conference
Call Today at 3:45 p.m. CT (4:45 p.m. ET)
Cardiovascular Systems, Inc. will host a live conference call and webcast of its fiscal
third-quarter results today, May 4, 2011, at 3:45 p.m. CT (4:45 p.m. ET). To access the call, dial
(888) 713-4218 and enter access number 61587023. Please dial in at least 10 minutes prior to the
call and wait for operator assistance, or dial 0 for operator assistance. To listen to the live
webcast, go to the investor information section of the companys website, www.csi360.com,
and click on the webcast icon. A webcast replay will be available beginning at 7 p.m. CT the same
day.
For an audio replay of the conference call, dial (888) 286-8010 and enter access number 71171713.
The audio replay will be available beginning at 8 p.m. CT on Wednesday, May 4, 2011, through 6 p.m.
CT on Friday, May 6, 2011.
Use of Non-GAAP Financial Measures
To supplement CSIs consolidated condensed financial statements prepared in accordance with U.S.
generally accepted accounting principles (GAAP), CSI uses certain non-GAAP financial measures in
this release. Reconciliations of the non-GAAP financial measures used in this release to the most
comparable U.S. GAAP measures for the respective periods can be found in tables later in this
release immediately following the consolidated statements of operations. Non-GAAP financial
measures have limitations as analytical tools and should not be considered in isolation or as a
substitute for CSIs financial results prepared in accordance with GAAP.
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 4
About Peripheral Arterial Disease
As many as 12 million Americans, most over age 65, suffer from PAD, which is caused by the
accumulation of plaque in peripheral arteries (commonly the pelvis or leg) reducing blood flow.
Symptoms include leg pain when walking or at rest. Left untreated, PAD can lead to severe pain,
immobility, non-healing wounds and eventually limb amputation. With risk factors such as diabetes
and obesity on the rise, the prevalence of PAD is growing at double-digit rates.
Millions of patients with PAD may benefit from treatment with the Stealth 360° and
Diamondback 360°, minimally invasive catheter systems developed and manufactured by CSI. These
systems use a diamond-coated crown, attached to a guide wire, which sands away plaque while
preserving healthy vessel tissue, or medial integrity a critical factor in preventing
reoccurrences. Balloon angioplasty and stents have significant shortcomings in treating hard,
calcified lesions. Stents are prone to fractures and high recurrence rates, and treatment of hard,
calcified lesions often leads to vessel damage and suboptimal results.
About Cardiovascular Systems, Inc.
Cardiovascular Systems, Inc., based in St. Paul, Minn., is a medical device company focused on
developing and commercializing innovative solutions for treating vascular and coronary disease. The
companys Stealth 360°, Diamondback 360® and Diamondback Predator 360®
Orbital PAD Systems treat calcified and fibrotic plaque in arterial vessels throughout the leg in a
few minutes of treatment time, and address many of the limitations associated with existing
surgical, catheter and pharmacological treatment alternatives. The U.S. FDA granted 510(k)
clearance for the use of the Diamondback 360° in August 2007 and for the Stealth 360° in March
2011. To date, more than 46,000 PAD procedures have been performed using the Diamondback 360° in
leading institutions across the United States.
CSI has also commenced its ORBIT II Investigational Device Exemption clinical trial to evaluate the
safety and effectiveness of its Diamondback 360° System in treating coronary arteries. The coronary
system is under clinical investigation and is currently not commercially available in the United
States.
For more information, visit the companys website at www.csi360.com.
Safe Harbor
Certain statements in this news release are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and are provided under the protection of the safe
harbor for forward-looking statements provided by that Act. For example, statements in this press
release regarding (i) CSIs future profitability; (ii) anticipated sustainable revenue growth;
(iii) the expected benefits of the Stealth 360°, including as a game-changer in the future
treatment of peripheral arterial disease; (iv) the expected full commercial launch of the Stealth
360°; (v) CSIs clinical trials; and (vi) anticipated revenue, gross profit, operating expenses,
interest and other expense, net loss and adjusted EBITDA in future periods, are forward-looking
statements. These statements involve risks and uncertainties which could cause results to differ
materially from those projected, including but not limited to the potential for unanticipated
delays in enrolling medical centers and patients for clinical trials; dependence on market growth;
the reluctance of physicians to accept new products; the effectiveness of the Stealth 360°; actual
clinical trial results; the impact of competitive products and pricing; the difficulty to
successfully manage operating costs; fluctuations in quarterly results; FDA clearances and
approvals; approval of products for reimbursement and the level of reimbursement; general economic
conditions and other factors detailed from time to time in CSIs SEC reports, including its most
recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. CSI encourages you
to consider all of these risks, uncertainties and other factors carefully in evaluating the
forward-looking statements contained in this
release. As a result of these matters, changes in facts, assumptions not being realized or other
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 5
circumstances, CSIs actual results may differ materially from the expected results discussed in
the forward-looking statements contained in this release. The forward-looking statements made in
this release are made only as of the date of this release, and CSI undertakes no obligation to
update them to reflect subsequent events or circumstances.
Product Disclosure
The Stealth 360° Orbital PAD System. Diamondback 360® Orbital PAD System and
Diamondback Predator 360® Orbital PAD System are percutaneous orbital atherectomy
systems indicated for use as therapy in patients with occlusive atherosclerotic disease in
peripheral arteries and stenotic material from artificial arteriovenous dialysis fistulae. The
systems are contraindicated for use in coronary arteries, bypass grafts, stents or where thrombus
or dissections are present. Although the incidence of adverse events is rare, potential events
that can occur with atherectomy include: pain, hypotension, CVA/TIA, death, dissection,
perforation, distal embolization, thrombus formation, hematuria, abrupt or acute vessel closure,
or arterial spasm.
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 6
Cardiovascular Systems, Inc.
Consolidated Statements of Operations
(Dollars in Thousands, except per share and share amounts)
(unaudited)
|
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|
|
|
|
|
|
|
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|
Three Months Ended |
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Nine Months Ended |
|
|
|
March 31, |
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|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Revenues |
|
$ |
20,152 |
|
|
$ |
16,519 |
|
|
$ |
57,073 |
|
|
$ |
46,814 |
|
Cost of goods sold |
|
|
3,949 |
|
|
|
3,847 |
|
|
|
12,063 |
|
|
|
10,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
16,203 |
|
|
|
12,672 |
|
|
|
45,010 |
|
|
|
35,964 |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
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|
Selling, general and administrative |
|
|
16,415 |
|
|
|
16,382 |
|
|
|
46,597 |
|
|
|
47,150 |
|
Research and development |
|
|
1,780 |
|
|
|
2,459 |
|
|
|
6,316 |
|
|
|
7,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
|
18,195 |
|
|
|
18,841 |
|
|
|
52,913 |
|
|
|
54,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(1,992 |
) |
|
|
(6,169 |
) |
|
|
(7,903 |
) |
|
|
(18,607 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income (expense) |
|
|
(392 |
) |
|
|
(349 |
) |
|
|
(739 |
) |
|
|
(896 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,384 |
) |
|
$ |
(6,518 |
) |
|
$ |
(8,642 |
) |
|
$ |
(19,503 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.15 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.55 |
) |
|
$ |
(1.33 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
Weighted average common shares
used in computation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
16,146,667 |
|
|
|
14,878,859 |
|
|
|
15,778,287 |
|
|
|
14,681,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 7
Cardiovascular Systems, Inc.
Consolidated Balance Sheets
(Dollars in Thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
18,618 |
|
|
$ |
23,717 |
|
Accounts receivable, net |
|
|
13,342 |
|
|
|
9,394 |
|
Inventories |
|
|
4,865 |
|
|
|
4,319 |
|
Prepaid expenses and other current assets |
|
|
727 |
|
|
|
1,048 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
37,552 |
|
|
|
38,478 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
2,220 |
|
|
|
1,964 |
|
Patents, net |
|
|
2,192 |
|
|
|
1,712 |
|
Other assets |
|
|
1,762 |
|
|
|
568 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
43,726 |
|
|
$ |
42,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
3,723 |
|
|
$ |
2,302 |
|
Accounts payable |
|
|
4,488 |
|
|
|
3,353 |
|
Deferred grant incentive |
|
|
717 |
|
|
|
1,181 |
|
Accrued expenses |
|
|
6,519 |
|
|
|
6,569 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
15,447 |
|
|
|
13,405 |
|
|
|
|
|
|
|
|
Long-term liabilities |
|
|
|
|
|
|
|
|
Long-term debt, net of current maturities |
|
|
9,598 |
|
|
|
8,985 |
|
Deferred grant incentive |
|
|
1,741 |
|
|
|
2,208 |
|
Other liabilities |
|
|
112 |
|
|
|
409 |
|
|
|
|
|
|
|
|
Total long-term liabilities |
|
|
11,451 |
|
|
|
11,602 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
26,898 |
|
|
|
25,007 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
16,828 |
|
|
|
17,715 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
43,726 |
|
|
$ |
42,722 |
|
|
|
|
|
|
|
|
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 8
Non-GAAP Financial Measures
To supplement CSIs consolidated condensed financial statements prepared in accordance with GAAP,
CSI uses a non-GAAP financial measure referred to as Adjusted EBITDA in this release.
Reconciliations of Adjusted EBITDA to the most comparable U.S. GAAP measure for the respective
periods can be found in the table below. In addition, an explanation of the manner in which CSIs
management uses Adjusted EBITDA to conduct and evaluate its business, the economic substance behind
managements decision to use Adjusted EBITDA, the substantive reasons why management believes that
Adjusted EBITDA provides useful information to investors, the material limitations associated with
the use of Adjusted EBITDA and the manner in which management compensates for those limitations is
included following the reconciliation table below.
Cardiovascular Systems, Inc.
Supplemental Sales Information
(Dollars in Thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Device revenue |
|
$ |
17,639 |
|
|
$ |
14,486 |
|
|
$ |
50,099 |
|
|
$ |
41,466 |
|
Other product revenue |
|
|
2,513 |
|
|
|
2,033 |
|
|
|
6,974 |
|
|
|
5,348 |
|
Total revenue |
|
$ |
20,152 |
|
|
$ |
16,519 |
|
|
$ |
57,073 |
|
|
$ |
46,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Device units sold |
|
|
5,816 |
|
|
|
4,870 |
|
|
|
16,662 |
|
|
|
13,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New customers |
|
|
57 |
|
|
|
52 |
|
|
|
181 |
|
|
|
155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reorder revenue % |
|
|
94 |
% |
|
|
93 |
% |
|
|
93 |
% |
|
|
92 |
% |
Cardiovascular Systems, Inc.
Adjusted EBITDA
(Dollars in Thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual |
|
|
Projected Range |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Three Months Ending |
|
|
|
March 31, |
|
|
March 31, |
|
|
June 30, 2011 |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
High |
|
|
Low |
|
|
|
|
|
|
Loss from operations |
|
$ |
(1,992 |
) |
|
$ |
(6,169 |
) |
|
$ |
(7,903 |
) |
|
$ |
(18,607 |
) |
|
$ |
(500 |
) |
|
$ |
(1,100 |
) |
Add: Stock-based
compensation |
|
|
1,316 |
|
|
|
2,122 |
|
|
|
5,221 |
|
|
|
6,460 |
|
|
|
1,300 |
|
|
|
1,300 |
|
Add: Depreciation
and amortization |
|
|
181 |
|
|
|
156 |
|
|
|
518 |
|
|
|
435 |
|
|
|
200 |
|
|
|
200 |
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
(495 |
) |
|
$ |
(3,891 |
) |
|
$ |
(2,164 |
) |
|
$ |
(11,712 |
) |
|
$ |
1,000 |
|
|
$ |
400 |
|
|
|
|
|
|
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 9
Use and Economic Substance of Non-GAAP Financial Measures Used by CSI and Usefulness of Such
Non-GAAP Financial Measures to Investors
CSI uses Adjusted EBITDA as a supplemental measure of performance and believes this measure
facilitates operating performance comparisons from period to period and company to company by
factoring out potential differences caused by depreciation and amortization expense and non-cash
charges such as stock based compensation. CSIs management uses Adjusted EBITDA to analyze the
underlying trends in CSIs business, assess the performance of CSIs core operations, establish
operational goals and forecasts that are used to allocate resources and evaluate CSIs performance
period over period and in relation to its competitors operating results. Additionally, CSIs
management is evaluated on the basis of Adjusted EBITDA when determining achievement of their
incentive compensation performance targets.
CSI believes that presenting Adjusted EBITDA provides investors greater transparency to the
information used by CSIs management for its financial and operational decision-making and allows
investors to see CSIs results through the eyes of management. CSI also believes that providing
this information better enables CSIs investors to understand CSIs operating performance and
evaluate the methodology used by CSIs management to evaluate and measure such performance.
The following is an explanation of each of the items that management excluded from Adjusted EBITDA
and the reasons for excluding each of these individual items:
Stock-based compensation. CSI excludes stock-based compensation expense from its non-GAAP
financial measures primarily because such expense, while constituting an ongoing and recurring
expense, is not an expense that requires cash settlement. CSIs management also believes that
excluding this item from CSIs non-GAAP results is useful to investors to understand the
application of stock-based compensation guidance and its impact on CSIs operational performance,
liquidity and its ability to make additional investments in the company, and it allows for greater
transparency to certain line items in CSIs financial statements.
Depreciation and amortization expense. CSI excludes depreciation and amortization expense from
its non-GAAP financial measures primarily because such expenses, while constituting ongoing and
recurring expenses, are not expenses that require cash settlement and are not used by CSIs
management to assess the core profitability of CSIs business operations. CSIs management also
believes that excluding these items from CSIs non-GAAP results is useful to investors to
understand CSIs operational performance, liquidity and its ability to make additional investments
in the company.
Material Limitations Associated with the Use of Non-GAAP Financial Measures and Manner in which CSI
Compensates for these Limitations
Non-GAAP financial measures have limitations as analytical tools and should not be considered in
isolation or as a substitute for CSIs financial results prepared in accordance with GAAP. Some of
the limitations associated with CSIs use of these non-GAAP financial measures are:
Items such as stock-based compensation do not directly affect CSIs cash flow position; however,
such items reflect economic costs to CSI and are not reflected in CSIs Adjusted EBITDA and
therefore these non-GAAP measures do not reflect the full economic effect of these items.
(more)
Cardiovascular Systems, Inc.
May 4, 2011
Page 10
Non-GAAP financial measures are not based on any comprehensive set of accounting rules or
principles and therefore other companies may calculate similarly titled non-GAAP financial measures
differently than CSI, limiting the usefulness of those measures for comparative purposes.
CSIs management exercises judgment in determining which types of charges or other items should
be excluded from the non-GAAP financial measures CSI uses.
CSI compensates for these limitations by relying primarily upon its GAAP results and using non-GAAP
financial measures only supplementally. CSI provides full disclosure of each non-GAAP financial
measure CSI uses and detailed reconciliations of each non-GAAP measure to its most directly
comparable GAAP measure. CSI encourages investors to review these reconciliations. CSI qualifies
its use of non-GAAP financial measures with cautionary statements as set forth above.
|
|
|
Contacts: |
|
|
|
|
|
Cardiovascular Systems, Inc.
|
|
Padilla Speer Beardsley Inc. |
Investor Relations
|
|
Marian Briggs |
(651) 259-2800
|
|
(612) 455-1742 |
investorrelations@csi360.com
|
|
mbriggs@psbpr.com |
|
|
|
|
|
Nancy A. Johnson |
|
|
(612) 455-1745 |
|
|
njohnson@psbpr.com |
# # #