8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2007

ev3 Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or Other Jurisdiction of Incorporation)	000-51348 (Commission File Number)	32-0138874 (I.R.S. Employer Identification Number)
9600 54th Avenue North, Suite 100
Plymouth, Minnesota		55442
(Address of Principal Executive Offices)		(Zip Code)

(763) 398-7000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Press Release

Item 2.02. Results of Operations and Financial Condition.

     On October 31, 2007, ev3 Inc. issued a press release announcing its results of operations and financial condition for its fiscal third quarter ended September 30, 2007. A copy of this press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

     The information contained in this report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filings made by ev3 Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as may be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

     (c) Exhibits.

Exhibit No.	Description
99.1	Press Release issued October 31, 2007

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ev3 Inc.
Dated: October 31, 2007	By:	/s/ Patrick D. Spangler
		Name:	Patrick D. Spangler
		Title:	Senior Vice President, Chief Financial Officer and Treasurer

ev3 Inc.
CURRENT REPORT ON FORM 8-K

EXHIBIT INDEX

Exhibit No.	Description	Method of Filing
99.1	Press Release issued October 31, 2007	Furnished herewith

EX-99.1

Exhibit 99.1

CONTACTS:
Patrick Spangler, CFO
ev3 Inc.
(763) 398-7000
pspangler@ev3.net

MEDIA RELATIONS:
Laura Nobles
Nobles Communications
(310) 795-0497
laura@noblescommunications.com

INVESTOR RELATIONS:
Marian Briggs
Padilla Speer Beardsley
(612) 455-1742
mbriggs@psbpr.com

ev3 Inc. Reports Third Quarter Financial Results

Conference Call Scheduled for October 31, 2007 at 8:00 a.m. CT;
Simultaneous Webcast at www.ev3.net

PLYMOUTH, Minn. — October 31, 2007 — ev3 Inc. (NASDAQ: EVVV), a global endovascular device company, today reported financial results for its fiscal third quarter of 2007.

As previously reported, ev3’s net sales in the third quarter of 2007 increased 25% to approximately $65.1 million versus net sales of $51.9 million in the third quarter of 2006. The company’s guidance range for third quarter net sales was $64 to $68 million. This third quarter sales growth reflected a strong contribution from ev3’s peripheral vascular and neurovascular business segments as well as domestic and international markets.

Jim Corbett, chairman, president and CEO of ev3 Inc., commented, “We are pleased with our third quarter sales growth and are carrying solid momentum into this exciting new phase of growth and opportunity for the combined ev3 and FoxHollow organization.”

ev3’s net loss for the third quarter of 2007 increased to $36.5 million compared to $12.5 million in the third quarter of 2006. ev3’s net loss per common share was $0.60 for the third quarter of 2007 compared to a net loss of $0.22 per common share for the third quarter of 2006. The third quarter of 2007 net loss

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reflects a special charge of $20.2 million related to the agreements in principle to settle certain litigation as described below and $4.6 million of integration expenses related to the merger with FoxHollow. Total weighted average common shares outstanding used in the per share calculations were 60.4 million and 57.0 million for the third quarter of 2007 and 2006, respectively.

ev3’s earnings before interest, taxes, depreciation and amortization (EBITDA), excluding charges for non-cash stock-based compensation, was a negative $28.4 million in the third quarter of 2007, compared to a negative $5.0 million in the third quarter of 2006. Third quarter of 2007 EBITDA, excluding charges for non-cash stock-based compensation, includes the agreements in principle to settle certain litigation of $20.2 million and $4.6 million of integration related expenses described above. ev3 uses the non-GAAP financial measure, EBITDA, excluding charges for non-cash stock-based compensation, as a supplemental measure of performance and believes that this measure facilitates operating performance comparisons from period to period and company to company. A reconciliation of these non-GAAP numbers to ev3’s net loss for the respective periods can be found immediately following the detail of net sales by geography later in this press release. This information is also available on the company’s website at www.ev3.net.

Agreements in Principle to Settle Litigation

The significant increase in ev3’s net loss for third quarter of 2007 compared to the same period last year is primarily due to a $20.2 million special charge related to recent agreements in principle to settle certain patent infringement and other litigation between ev3 and its subsidiaries, The Regents of the University of California and Boston Scientific Corporation. As previously announced by ev3 earlier today, the terms of the agreements in principle include the following: all claims by all parties will be dismissed; ev3 will continue to be able to sell all involved product lines with no future royalty obligation; and ev3 will make a one-time payment of approximately $11.7 million to the University of California and a one-time payment of approximately $3.7 million to Boston Scientific. Products involved in the litigation include embolic protection devices and certain detachable embolic coils. The settlements remain subject to negotiation of final written agreements among the parties and the settlement terms with the University of California remain subject to final approval by The Regents of the University of California. The $20.2 million special charge consists of amounts expected to be paid by ev3 to the parties and legal fees and expenses associated with the litigation.

Sales Review

In the third quarter of 2007, ev3’s neurovascular segment net sales increased 27% to $26.4 million versus $20.7 million in the third quarter of 2006. Within the neurovascular business segment, sales of embolic products increased 44% to $14.7 million from $10.2 million, and sales of neurovascular access and

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delivery products were up 10% to $11.7 million from $10.5 million. The primary growth drivers for the neurovascular segment were the continued market penetration of both the Onyx Liquid Embolic System for the treatment of brain arterio-venous malformations (AVMs) and the launch of the new Axium coil.

Peripheral vascular segment net sales in the third quarter of 2007 increased 24% to $38.7 million versus $31.2 million in the third quarter of 2006. Within the peripheral vascular business segment, stent sales increased 40% to $23.1 million from $16.5 million. Sales of thrombectomy and embolic protection products declined 7% to $5.4 million from $5.8 million, while sales of procedural support and other peripheral vascular products increased 15% to $10.2 million from $8.9 million. The largest contributor to the growth in the peripheral vascular segment was the EverFlex stent, while the decline in thrombectomy and embolic protection sales was due to a shift in marketing focus for certain thrombectomy products.

On a geographic basis, ev3’s third quarter of 2007 U.S. net sales increased 23% to $38.3 million, while third quarter of 2007 international net sales increased 29% to $26.8 million, over the prior-year quarter. Changes in foreign currency exchange rates had a positive impact of approximately $1.2 million on third quarter of 2007 net sales compared to the third quarter of the prior year.

Outlook — Fourth Quarter 2007

ev3 reiterated its previously communicated outlook for fourth quarter of 2007 net sales of $108 million or greater. Fourth quarter revenue guidance does not include FoxHollow sales for the first four days of the quarter prior to the completion of the merger, estimated to be $3.9 million. Fourth quarter revenue guidance also anticipates reduced sales force productivity during the company’s integration and sales training. As a result of restructuring charges, business integration-related expenses and purchase accounting adjustments, ev3 expects to incur a significant net loss in the fourth quarter of 2007.

ev3 currently estimates one-time transaction and integration-related cash outflows related to the merger to be approximately $73 million. While a significant portion of the cash outflows will be accounted for under purchase accounting, ev3 expects the impact on earnings from these one-time expenses to be approximately $8 to $10 million in the fourth quarter of 2007, exclusive of any in-process research and development charges related to the purchase accounting. Including all such cash expenditures, and also litigation expenditures as discussed above, ev3 expects its available cash at year end to be approximately $45 million.

Outlook — 2008

ev3 reiterated its previously communicated outlook for full year 2008 net sales of $570 million or greater. This guidance assumes a delay in the approval of the FoxHollow RockHawk device and lower than

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originally anticipated revenue recognized from the agreement with Merck & Co., Inc. due to purchase accounting adjustments required in connection with the merger. ev3 also reiterated its expectations for adjusted earnings per share, including the impact of amortization expense, but excluding one-time transaction-related costs, to be $0.55 cents per share or greater based on approximately 107 million of outstanding shares. Excluding all amortization expense, adjusted earnings per share in 2008 would be approximately $0.25 higher. ev3 expects the impact on earnings from one-time expenses in 2008 to be approximately $1 to $3 million.

Pro Forma Combined 2007 Quarterly Net Sales; Fourth Quarter 2007 Guidance

As previously announced, ev3 and FoxHollow Technologies, Inc. successfully completed their merger on October 4, 2007. The unaudited combined financial information in the table below summarizes the combined consolidated net sales results, on a pro forma basis, as though the companies had been combined as of the beginning of each of the periods presented. This table also shows the fourth quarter 2007 guidance previously announced by ev3 for the combined entity. The following pro forma financial information is presented for informational purposes only and is not indicative of the net sales that would have been achieved if the merger had taken place at the beginning of each of the periods presented nor are they indicative of the combined company’s net sales following the merger. The following pro forma financial information has been derived from the respective historical consolidated financial statements of ev3 and FoxHollow and no adjustments or assumptions have been made regarding the combined company after giving effect to the merger. None of the net sales reflected for FoxHollow in the table below for periods on or prior to October 4, 2007 will be included in ev3’s consolidated financial results for fourth quarter 2007 or full year 2007. The column entitled “Q4 2007 Guidance” represents ev3’s current expectations for fourth quarter of 2007 net sales and therefore is forward-looking information and not derived from ev3’s or FoxHollow’s historical consolidated financial statements.

							10/1/07 - 10/4/07
							FoxHollow		Q4 2007
(Dollars in thousands)	Q1 2007		Q2 2007		Q3 2007		Stub Period*		Guidance
(unaudited)
ev3	$	61,499	$	65,396	$	65,060
FoxHollow		49,217		50,620		51,997	$	3,876
Total Pro-Forma Net Sales	$	110,716	$	116,016	$	117,057	$	3,876
Combined ev3 / FoxHollow									$	108,000

* Will not be included in ev3 Inc. consolidated fourth quarter of 2007 results

Conference Call Information

ev3 will host a conference call today, October 31, 2007, beginning at 8:00 a.m. CT to provide a brief overview of ev3’s financial results for the third quarter of 2007. Discussions during the conference call

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may include forward-looking statements regarding such topics as, but not limited to, the company’s net sales, cost of goods sold, operating expenses, distribution arrangements, clinical studies, regulatory status, financial position, merger integration efforts, restructuring charges, litigation status and comments the company may make about its future in response to questions from participants on the conference call. Any interested party may listen to the conference call through a live audio Webcast at www.ev3.net. For those unable to listen to the Webcast, a playback of the Webcast will be available at www.ev3.net for approximately 90 days. Those without Internet access may join the call from within the United States by dialing 800-299-9086; outside the United States dial 617-786-2903 passcode 13072134. A playback of the conference call will be available from 10:30 a.m. CT, October 31, 2007 until November 7, 2007 by dialing 888-286-8010 (United States) or 617-801-6888 (International), passcode 27865545.

About ev3 Inc.

ev3 Inc. is a global medical device company focused on improving the lives of patients with vascular disease through the development of innovative endovascular therapies.

ev3 and the ev3 logo are trademarks of ev3 Inc., registered in the U.S. and other countries. All trademarks and trade names referred to in this press release are the property of their respective owners.

Forward-Looking Statements

Statements contained in this press release that are not historical information are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about anticipated revenue synergies and cost savings as a result of ev3’s merger with FoxHollow and the timing thereof, ev3’s future financial and operating results, anticipated expenses as a result of ev3’s merger with FoxHollow and the timing thereof, anticipated costs and expenses paid in connection with outstanding litigation and other statements identified by words such as “expect,” “anticipate,” “estimate,” “will,” “would,” “outlook,” “guidance,” or words of similar meaning and any other statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of ev3’s management and are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Such potential risks and uncertainties include, but are not limited to, in no particular order: the failure to realize revenue synergies and cost-savings from ev3’s merger with FoxHollow or delay in realization thereof; the businesses of ev3 and FoxHollow not being integrated

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successfully, or such integration taking longer or being more difficult, time-consuming or costly to accomplish than expected; the failure to enter into settlement agreements with The Regents of the University of California and Boston Scientific Corporation on anticipated terms or at all; the impact of competitive products and pricing; changes in the regulatory environment; availability of third party reimbursement; potential margin pressure resulting from volume selling, as well as potential adverse effects on future product demand resulting from volume purchases; delays in regulatory approvals and the introduction of new products; and success of clinical testing. More detailed information on these and additional factors which could affect ev3’s operating and financial results is described in the company’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and its registration statement on Form S-4 filed in connection with its merger with FoxHollow. ev3 Inc. urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the company faces. Additionally, ev3 undertakes no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), ev3 uses certain non-GAAP financial measures. In this release, ev3 uses the non-GAAP financial measures, “EBITDA, excluding charges for non-cash stock-based compensation” and “adjusted earnings per share.” ev3 uses non-GAAP financial measures as supplemental measures of performance and believes these measures facilitate operating performance comparisons from period to period and company to company by factoring out potential differences caused by non-recurring, unusual or infrequent charges not related to ev3’s regular, ongoing business, variations in capital structure, tax positions, depreciation, non-cash charges and certain large and unpredictable charges. ev3 also believes that the presentation of certain non-GAAP financial measures provide useful information to investors in evaluating the company’s operations, period over period. Non-GAAP measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the company’s results as reported under GAAP. When analyzing ev3’s operating performance, investors should not consider ev3’s EBITDA, excluding charges for non-cash stock-based compensation, as a substitute for ev3’s net loss or ev3’s adjusted earnings per share as a substitute for ev3’s net income (loss) per share prepared in accordance with GAAP. In addition, investors should note that any non-GAAP financial measures used by ev3 may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. Whenever ev3 uses historical non-GAAP financial measures, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial

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measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure. A reconciliation of ev3’s EBITDA, excluding charges for non-cash stock-based compensation, to ev3’s net loss can be found immediately following the detail of net sales by geography later in this press release. This information is also made available on the company’s website at www.ev3.net. ev3, however, does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation and net income (loss), net income (loss) per common share and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data. In particular, ev3 is providing adjusted earnings per share guidance in this release only on a non-GAAP basis due to the inherent uncertainties associated with forecasting the timing and amount of restructuring, impairment and other unusual and infrequent items associated with its merger with FoxHollow.

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ev3 Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
	2007			2006			2007			2006
Net sales	$	65,060		$	51,906		$	191,955		$	144,763
Operating expenses
Cost of goods sold (a)		23,097			17,666			65,916			52,333
Sales, general and administrative (a)		45,353			35,498			125,372			109,167
Research and development (a)		10,708			7,036			29,464			19,857
Amortization of intangible assets		3,952			4,483			11,916			13,008
(Gain) loss on sale or disposal of assets, net		—			18			(988	)		142
Acquired in-process research and development		—			—			—			1,786
Special charges		20,183			—			20,183			—
Total operating expenses		103,293			64,701			251,863			196,293
Loss from operations		(38,233	)		(12,795	)		(59,908	)		(51,530	)
Other income:
Gain on sale of investments, net		—			—			—			(1,063	)
Interest income, net		(417	)		(258	)		(823	)		(1,471	)
Other income, net		(1,554	)		(152	)		(2,066	)		(1,533	)
Loss before income taxes		(36,262	)		(12,385	)		(57,019	)		(47,463	)
Income tax expense		250			82			858			328
Net loss	$	(36,512	)	$	(12,467	)	$	(57,877	)	$	(47,791	)
Earnings per share:
Net loss per common share (basic and diluted)	$	(0.60	)	$	(0.22	)	$	(0.98	)	$	(0.85	)
Weighted average common shares outstanding		60,365,027			57,032,677			59,141,035			56,556,305
(a) Includes stock-based compensation charges of:
Cost of goods sold	$	101		$	127		$	446		$	496
Sales, general and administrative		2,100			1,389			6,166			4,554
Research and development		269			151			717			523
	$	2,470		$	1,667		$	7,329		$	5,573

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ev3 Inc.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)

	September 30,			December 31,
	2007			2006
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	49,336		$	24,053
Short-term investments		7,800			14,700
Accounts receivable, less allowance of $4,130 and $3,924, respectively		58,476			45,137
Inventories		44,425			42,124
Prepaid expenses and other assets		9,185			7,162
Other receivables		1,721			2,669
Total current assets		170,943			135,845
Restricted cash		1,367			2,022
Property and equipment, net		25,131			24,072
Goodwill		149,061			149,061
Other intangible assets, net		38,462			40,014
Other assets		1,103			1,812
Total assets	$	386,067		$	352,826
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	15,422		$	13,140
Accrued compensation and benefits		18,392			16,382
Accrued liabilities		36,608			10,102
Current portion of long-term debt		3,571			2,143
Total current liabilities		73,993			41,767
Long-term debt		7,321			5,357
Other long-term liabilities		889			468
Total liabilities		82,203			47,592
Stockholders’ equity
Common stock: $0.01 par value; 100,000,000 shares authorized; issued and outstanding: 61,079,654 and 57,594,742, respectively		611			576
Additional paid in capital		976,743			919,221
Accumulated deficit		(673,171	)		(614,578	)
Accumulated other comprehensive (loss) income		(319	)		15
Total stockholders’ equity		303,864			305,234
Total liabilities and stockholders’ equity	$	386,067		$	352,826

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ev3 Inc.
SELECTED NET SALES INFORMATION
(Dollars in thousands)
(unaudited)

NET SALES BY SEGMENT

	For the Three Months Ended							For the Nine Months Ended
	September 30,		October 1,					September 30,		October 1,
	2007		2006		% change			2007		2006		% change
Peripheral Vascular
Stents	$	23,105	$	16,525		40	%	$	65,064	$	45,591		43	%
Thrombectomy and embolic protection		5,368		5,750		-7	%		20,029		15,429		30	%
Procedural support and other		10,240		8,894		15	%		30,742		26,062		18	%
Total peripheral vascular		38,713		31,169		24	%		115,835		87,082		33	%
Neurovascular
Embolic products		14,698		10,177		44	%		40,451		26,972		50	%
Neuro access and delivery products and other		11,649		10,560		10	%		35,669		30,709		16	%
Total neurovascular		26,347		20,737		27	%		76,120		57,681		32	%
Total company	$	65,060	$	51,906		25	%	$	191,955	$	144,763		33	%

NET SALES BY GEOGRAPHY

	For the Three Months Ended							For the Nine Months Ended
	September 30,		October 1,					September 30,		October 1,
	2007		2006		% change			2007		2006		% change
United States	$	38,312	$	31,127		23	%	$	113,028	$	86,590		31	%
International		26,748		20,779		29	%		78,927		58,173		36	%
Total net sales	$	65,060	$	51,906		25	%	$	191,955	$	144,763		33	%

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ev3 Inc.
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
(unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
	2007			2006			2007			2006
Reconciliation of net loss to EBITDA
Net loss, as reported (GAAP basis)	$	(36,512	)	$	(12,467	)	$	(57,877	)	$	(47,791	)
Interest income, net		(417	)		(258	)		(823	)		(1,471	)
Income tax expense		250			82			858			328
Depreciation and amortization		5,829			5,927			17,403			17,024
EBITDA	$	(30,850	)	$	(6,716	)	$	(40,439	)	$	(31,910	)
Stock-based compensation		2,470			1,667			7,329			5,573
EBITDA, adjusted for stock-based compensation	$	(28,380	)	$	(5,049	)	$	(33,110	)	$	(26,337	)

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