-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Km0HHevncMQb1IWzdgYD9Rw87AyYa/oI/n+021kbQOnWbpBijiFW+Dh0A3j8YV/Y UF0o3oJuAWRxJACEhvmR8w== 0001047469-99-028895.txt : 19990729 0001047469-99-028895.hdr.sgml : 19990729 ACCESSION NUMBER: 0001047469-99-028895 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABIOMED INC CENTRAL INDEX KEY: 0000815094 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 042743260 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20584 FILM NUMBER: 99672117 BUSINESS ADDRESS: STREET 1: 33 CHERRY HILL DR CITY: DANVERS STATE: MA ZIP: 01923 BUSINESS PHONE: 5087775410 MAIL ADDRESS: STREET 1: 33 CHERRY HILL DRIVE CITY: DANVERS STATE: MA ZIP: 01923 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1999 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------- ------------- Commission file number 0-20584 ------- ABIOMED, INC. ------------- (Exact name of registrant as specified in its charter) DELAWARE 04-2743260 ------------- ------------- (State of incorporation) (IRS Employer No.) 33 CHERRY HILL DRIVE DANVERS, MASSACHUSETTS 01923 ------------------------------- (Address of principal executive offices, including zip code) (978) 777-5410 --------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) or the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of July 23, 1999, there were 8,653,102 shares outstanding of the registrant's Common Stock, $.01 par value. ABIOMED, INC. AND SUBSIDIARIES TABLE OF CONTENTS ------------------- Page No. --------- Part I - Financial Information: Item 1. Condensed Consolidated Financial Statements Consolidated Balance Sheets June 30, 1999 and March 31, 1999 3-4 Consolidated Statements of Operations Three Months Ended June 30, 1999 and June 30, 1998 5 Consolidated Statements of Cash Flows Three Months Ended June 30, 1999 and June 30, 1998 6 Notes to Consolidated Financial Statements 7-10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11-15 Part II - Other Information 16 Signatures 17 2 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS ------------------------------ ASSETS ----------
June 30, 1999 March 31, 1999 (unaudited) (audited) ------------- -------------- Current Assets: Cash and cash equivalents (Note 7) $ 5,710,163 $ 9,279,210 Short-term marketable securities (Note 8) 9,970,351 8,902,031 Accounts receivable, net of allowance for doubtful accounts of $204,000 at June 30, 1999 and March 31, 1999, respectively 7,780,548 6,437,225 Inventories (Note 4) 3,064,801 2,895,857 Prepaid expenses and other current assets 494,157 335,403 ------------- --------------- Total current assets 27,020,020 27,849,726 ------------- --------------- Property and Equipment, at cost: Machinery and equipment 5,576,495 5,443,930 Furniture and fixtures 579,428 575,166 Leasehold improvements 1,838,382 1,728,351 --------- --------- 7,994,305 7,747,447 Less: Accumulated depreciation and amortization 4,496,925 3,884,088 --------- --------- 3,497,380 3,863,359 --------- --------- Other Assets, net (Notes 2 and 9) 1,314,836 1,268,536 ---------- ---------- $ 31,832,236 $ 32,981,621 ---------- ---------- ---------- ----------
The accompanying notes are an integral part of these consolidated financial statements. 3 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS (continued) CONSOLIDATED BALANCE SHEETS (CONTINUED) LIABILITIES AND STOCKHOLDERS' INVESTMENT
June 30, 1999 March 31, 1999 (unaudited) (audited) ---------------- ---------------- Current Liabilities: Accounts payable $ 810,027 $ 874,648 Accrued expenses 4,480,296 4,830,620 ---------- --------- Total current liabilities 5,290,323 5,705,268 ---------- --------- Long Term Liabilities 189,999 204,816 Stockholders' Investment (Note 5): Class B Preferred Stock, $.01 par value- Authorized 1,000,000 shares Issued and outstanding-none -- -- Common Stock, $.01 par value- Authorized 25,000,000 shares Issued and outstanding- 8,653,102 shares at June 30, 1999 and 8,650,802 shares at March 31, 1999 86,531 86,508 Additional paid-in capital 58,238,283 58,219,906 Accumulated deficit (31,972,900) (31,234,877) -------------- -------------- Total stockholders' investment 26,351,914 27,071,537 -------------- -------------- $ 31,832,236 $ 32,981,621 -------------- -------------- -------------- --------------
The accompanying notes are an integral part of these consolidated financial statements. 4 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS (continued) CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended ------------------------------------------------- June 30, 1999 June 30, 1998 ----------------- ------------------ Revenues: Products $ 4,020,524 $ 3,524,510 Contracts 2,331,508 2,278,733 ---------- ---------- 6,352,032 5,803,243 ---------- ---------- Costs and expenses: Cost of product revenues 1,357,152 1,436,865 Research and development 3,391,633 3,033,780 Selling, general and administrative 2,498,352 2,231,867 ---------- --------- 7,247,137 6,702,512 ---------- --------- Loss from operations (895,105) (899,269) Interest and other income 157,082 357,212 ---------- ---------- Net loss $ (738,023) $ (542,057) ---------- ---------- ---------- ---------- Net loss per share (Note 6): Basic $ (0.09) $ (0.06) Diluted $ (0.09) $ (0.06) Weighted average shares outstanding (Note 6): Basic 8,651,952 8,573,302 Diluted 8,651,952 8,573,302
The accompanying notes are an integral part of these consolidated financial statements. 5 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS (continued) CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
Three Months Ended ----------------------------------------- June 30, 1999 June 30, 1998 ---------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (738,023) $ (542,057) Adjustments to reconcile net loss to net cash used in operating activities- Depreciation and amortization 665,282 374,462 Changes in assets and liabilities- Accounts receivable (1,343,323) (993,216) Inventories (168,944) (504,187) Prepaid expenses and other assets (257,499) 23,628 Accounts payable (64,621) (518,629) Accrued expenses (350,324) 60,859 Long-term liabilities (14,817) (10,780) ---------- ------------ Net cash used in operating activities (2,272,269) (2,109,920) ---------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from the sale of short-term marketable securities 981,288 13,076,467 Purchases of short-term marketable securities (2,049,608) (10,754,562) Purchases of property and equipment (246,858) (652,919) ----------- ------------ Net cash (used in) provided by investing activities (1,315,178) 1,668,986 ----------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 18,400 147,107 ----------- ------------ Net cash provided by financing activities 18,400 147,107 ----------- ------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (3,569,047) (293,827) CASH AND CASH EQUIVALENTS, EXCLUDING MARKETABLE SECURITIES, AT BEGINNING OF PERIOD 9,279,210 2,683,151 ----------- ------------ CASH AND CASH EQUIVALENTS, EXCLUDING MARKETABLE SECURITIES, AT END OF PERIOD $ 5,710,163 $ 2,389,324 ----------- ------------ ----------- ------------
The accompanying notes are an integral part of these consolidated financial statements. 6 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 1: FINANCIAL STATEMENTS (continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. BASIS OF PREPARATION Our unaudited consolidated financial statements of ABIOMED, Inc. (the Company), presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in our latest audited financial statements. These audited statements are contained in our Form 10-K for the year ended March 31, 1999 and have been filed with the Securities and Exchange Commission. In our opinion, the accompanying consolidated financial statements include all adjustments (consisting only of normal, recurring adjustments) necessary to summarize fairly the financial position and results of operations as of June 30, 1999 and for the three months then ended. The results of operations for the three months ended June 30, 1999 may not be indicative of the results that may be expected for the full fiscal year. 2. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries, and the accounts of its majority-owned subsidiary Abiomed Limited Partnership. All significant intercompany accounts and transactions have been eliminated in consolidation. 3. ACCOUNTS RECEIVABLE Accounts receivable include amounts due from customers, excluding long-term amounts due from customers under sales-type leases, net of allowance for doubtful accounts. Accounts receivable also include amounts due from government and other third party sources related to the our research and development contracts and grants. These research and development contracts and grants generally provide for payment on a cost-plus-fixed-fee basis. We seek funding from third-parties, including government sources, to support our research and development programs in their early stages and generally limit the use of our own funds until the scientific risk associated with a potential product is reduced. We recognize revenues under government contracts and grants as work is performed, provided that the government has appropriated sufficient funds for the work. The Company retains rights to all technological discoveries and products resulting from these 7 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 1: FINANCIAL STATEMENTS (continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited, continued) 3. ACCOUNTS RECEIVABLE (CONTINUED) efforts. As of June 30, 1999, accounts receivable included approximately $1.9 million in connection with AbioCor development scheduled to be collected over the remaining term of that contract which expires September 30, 2000. 4. INVENTORIES Inventories include raw materials, work-in-process, and finished goods and are priced at the lower of cost (first-in, first-out) or market and consist of the following:
June 30, March 31, 1999 1999 ---------- ------------ Raw materials $ 1,228,075 $ 1,403,253 Work-in-process 566,111 636,125 Finished goods 1,270,615 856,479 ----------- ----------- $ 3,064,801 $ 2,895,857 ----------- ----------- ----------- -----------
Finished goods and work-in-process inventories consist of direct material, labor and overhead. 5. STOCKHOLDERS' INVESTMENT During the three months ended June 30, 1999, no options to purchase shares of Common Stock were granted. During that same period options to purchase 14,650 shares were canceled and options to purchase 2,300 shares of Common Stock were exercised at a price of $8.000 per share. 6. NET (LOSS) INCOME PER COMMON SHARE We calculate net loss per common share in accordance with Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share, which requires that we present both basic and diluted net (loss) income per share for all periods presented. Basic net (loss) income per share ("Basic EPS") is computed by dividing net (loss) 8 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 1: FINANCIAL STATEMENTS (continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited, continued) 6. NET (LOSS) INCOME PER COMMON SHARE(CONTINUED) income by the weighted average number of common shares outstanding during the period. Diluted net (loss) income per share ("Diluted EPS") is computed by dividing net (loss) income by the weighted average number of common and common equivalent shares outstanding during the period using the treasury stock method. In computing Diluted EPS, common equivalent shares are not considered dilutive in periods in which a net loss is reported because they are antidilutive. Accordingly, Basic EPS and Diluted EPS are the same for the periods presented. The number of equivalent shares that otherwise would have been dilutive for the three months ended June 30, 1999 were 266,451. For the three months ended June 30, 1998, 263,617 shares would have otherwise been dilutive. 7. CASH AND CASH EQUIVALENTS We classify marketable securities with a maturity date of 90 days or less at the time of purchase are classified as a cash equivalent. 8. MARKETABLE SECURITIES We classify any security with a maturity of greater than 90 days at the time of purchase as marketable securities and classify marketable securities with a maturity of greater than one year from the balance sheet date as long-term investments. At June 30, 1999 these marketable securities consisted primarily of government grade securities and high-grade corporate bonds. The amortized cost of these securities approximated market value. 9. OTHER ASSETS Other assets include approximately $165,000 in unamortized purchase cost of the Company's majority interest of the Abiomed Limited Partnership. The interest in the Abiomed Limited Partnership is being amortized over its useful life of five years. Abiomed Limited Partnership (the Partnership) was formed in March 1985 and provided initial funding for the design and development of certain of our products. Through August 3, 2000, a royalty is owed to the Partnership equal to 5.5% of certain revenues from these products. Because the Company owns 61.7% of the Partnership, the net royalty expense to the 9 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 1: FINANCIAL STATEMENTS (continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited, continued) 9. OTHER ASSETS (CONTINUED) Company is approximately 2.1% of these product revenues. This royalty formula is subject to certain maximum amounts and to certain additional adjustments in the event that the Company sells the technology. The Partnership is inactive except with respect to receiving and distributing proceeds from these royalty rights. Also included in other assets are long-term accounts receivable related to sales-type leases. The terms of these non-cancelable leases are one to three years. As of June 30, 1999, the total amount due from sales-type leases was $2,375,000 of which $944,000 was classified as long-term receivables. As of March 31, 1999, the total amount due from these sales-type leases was $2,263,000 of which $892,000 was classified as long-term receivables. Other assets also include the unamortized cost of a number of awarded and pending patents. As of June 30, 1999, the unamortized cost of these patents approximated $205,000. As of March 31, 1999, the unamortized cost of these patents approximated $176,000. 10. RECLASSIFICATION OF PRIOR YEAR AMOUNTS Certain prior year financial statement information has been reclassified to be consistent with the current year presentation. 11. SEGMENT AND ENTERPRISE WIDE DISCLOSURES We believe that the Company operates in one business segment; the research, development, and sale of medical devices, with a primary focus on cardiac assist and heart replacement systems. 10 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1999 NET LOSS Net loss for the three months ended June 30, 1999 was approximately $738,000, or $0.09 per share. This compares to a net loss of approximately $542,000, or $0.06 per share, in the same period of the previous year. The losses for both three month periods are primarily attributable to the Company's development and pre-clinical testing costs associated with its AbioCor(TM) implantable replacement heart ("AbioCor"). REVENUES Product revenues increased by 14% to $4.0 million in the three months ended June 30, 1999 from $3.5 million in the three months ended June 30, 1998. This 14% increase was due primarily to increased average selling prices for BVS blood pumps and consoles. Domestic sales accounted for 97% of total product revenues in the three months ended June 30, 1999 and 92% for the same period a year earlier. Contract revenues were $2.3 million for both of the three months ended June 30, 1999 and June 30, 1998. Approximately $1.8 million of the contract revenues recognized in each of these periods were derived from the Company's AbioCor government contract. We recognize revenue under government contracts and grants as work is performed, provided that the government has appropriated sufficient funds for the work. As of June 30, 1999, the government has appropriated all of the $8.5 million AbioCor contract amount, including the $1.8 million appropriated and recognized as revenue during the quarter ended June 30, 1999. No amount remains to be recognized under the AbioCor contract as of June 30, 1999. As of June 30, 1999, the Company's total backlog of research and development contracts and grants was $3.1 million, including $1.3 million for AbioBooster(TM) research and development. Funding for these government research and development contracts is subject to government appropriation, and all of these contracts contain provisions that make them terminable at the convenience of the government. The Company retains rights to all technological discoveries and products resulting from these efforts. 11 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) COSTS AND EXPENSES Total costs and expenses increased to $7.2 million, 114% of total revenues, for the three months ended June 30, 1999, from $6.7 million, 115% of total revenues, for the three months ended June 30, 1998. The increase primarily reflects increased activities related to the development and pre-clinical testing of the AbioCor and enhancements to the BVS. Cost of product revenues as a percentage of product revenues were 34% and 41% for the three months ended June 30, 1999 and June 30, 1998, respectively. The majority of this decrease in cost of products sold as a percentage of product revenues was attributable to higher average selling prices during the current period than the same period last year, and a higher percentage of product revenues derived from blood pump sales, including blood pumps sold under sales-type lease programs. Blood pumps generally have a higher direct profit margin than BVS console sales. Research and development expenses increased by 12% to $3.4 million, 53% of total revenues, for the three months ended June 30, 1999, from $3.0 million, 52% of total revenues, for the three months ended June 30, 1998. The increase primarily reflected higher levels of spending to advance the development of the AbioCor and to enhance the BVS. Research and development expenses during the three months ended June 30, 1999 included $2.3 million of expenses incurred in connection with our development activities for the AbioCor, compared to $2.1 million for the same period of the prior year. Selling, general and administrative expenses increased by 12% to $2.5 million, 39% of total revenues, for the three months ended June 30, 1999, from $2.2 million, 38% of total revenues, for the three months ended June 30, 1998. This increase is primarily attributed to increased selling and marketing expenditures as a result of our implementing new programs designed to improve sales of our disposable blood pumps. Legal expenses have also increased during the first three months of fiscal 2000 in comparison to the prior year, primarily as a result of our litigation with World Heart Corporation and the Ottawa Heart Research Corporation. INTEREST AND OTHER INCOME Interest and other income consists primarily of interest income generated from our investment balances, net of interest and other expenses. Interest and other income decreased to $157,000 for the three months ended June 30, 1999 from $357,000 for the three months ended June 30, 1998. This decrease was primarily due to lower average funds available for investment. 12 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) INTEREST AND OTHER INCOME (CONTINUED) Income taxes incurred during these periods were not material and the Company continues to have significant net tax operating loss and tax credit carryforwards. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 1999, our balance in cash and short-term marketable securities was $15.7 million. The Company also has a $3.0 million line of credit from a bank that expires on November 30, 1999, and which was entirely available at June 30, 1999. In the three months ended June 30, 1999, operating activities used cash of $2,272,000. Net cash used by operating activities during the three months ended June 30, 1999 reflected a net loss of $738,000, increases in accounts receivable, inventory and prepaid expenses of $1,343,000, $169,000, $257,000 respectively, and decreases in accounts payable, accrued expenses, and long term liabilities of $65,000, $350,000, and $15,000 respectively. These uses of cash were partially offset by depreciation and amortization expense of $665,000 included in the net loss. The increase in accounts receivable is primarily attributable to the timing of collections related to our AbioCor government contract. During the three months ended June 30, 1999, investing activities used $1,315,000 of cash. Cash used in investing activities included net purchases of short-term marketable securities of $1,068,000 and $247,000 of purchases of capital equipment and improvements of property primarily to support the advanced development of the AbioCor. During the three months ended June 30, 1999, financing activities provided $18,000 of cash from the exercise of stock options. Although the Company does not currently have significant capital commitments, we believe that we will continue to make significant investments over the next several years to support the development and commercialization of our products and the expansion of our manufacturing and product development facilities. In addition, we estimate that we may incur additional cost of approximately $1.3 million as we complete preparations for and move to our new facility in 1999 and 2000. These estimated costs include costs to construct and qualify manufacturing clean rooms and costs for internal information and telephone systems and furniture. We are scheduled to begin moving to the new facility in July 1999. We intend to use the new facility to consolidate and expand our headquarters, manufacturing and research and development. 13 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) We believe that the Company's revenue and existing resources will be sufficient to fund our planned operations, including the planned increases in our internally funded AbioCor and new BVS development and product extension efforts, for at least the next twelve months. However, we estimate that it will require significant additional funds in order to complete the development, conduct clinical trials, and achieve regulatory approvals of the AbioCor and other products under development over the next several years. YEAR 2000 READINESS DISCLOSURE As the year 2000 approaches, it is generally anticipated that computers, software and other equipment utilizing microprocessors may be unable to function properly. We have evaluated this potential issue with respect to our products, our financial and management information systems and our suppliers. With respect to our products, the software controlling the BVS drive console includes internal counters, but the BVS operation is not related in any way to a specific calendar date. Accordingly, we believe that the BVS will not need any repair or modification with regard to the year 2000 issue. With respect to our financial and management information systems, we successfully installed and tested a year 2000 upgrade to our primary system and are currently working on execution of a plan to ensure that all personal computers ("PCs") and applications are fully assessed and updated to be year 2000 compliant before the end of 1999. To date, expenditures for new PCs, software applications, and operating systems under our year 2000 plan have amounted to less than $100,000. Remaining expenditures to complete the plan are expected to be immaterial. With respect to our suppliers, we are completing an assessment of vendors begun in fiscal 1999 and are increasing safety stocks of materials and inventory where a prolonged loss of material and inventory deliveries would have an adverse impact on our business, financial condition and results of operations. We have also made inquiries to assess our key service providers such as financial institutions, our payroll service provider, and our retirement plan administrator as to their year 2000 readiness and have received assurances that the vendors' critical systems have been updated, tested, and found to be compliant. Although we do not expect year 2000 issues to have a material impact on our business or future results of operations, there may be interruptions of operations or other limitations of system functionality or we may incur significant costs to avoid such interruptions or limitations. To the extent that we do not eliminate all year 2000 issues, the most likely worst case year 2000 scenario is systemic failures beyond the control of the Company, such as prolonged 14 ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) YEAR 2000 READINESS DISCLOSURE (CONTINUED) telecommunications or electrical failure, or a general disruption in supplies and services provided to the Company which could have a material adverse effect on our business, results of operations and financial condition. RISK FACTORS WHICH MAY AFFECT FUTURE RESULTS This document contains forward looking statements, including statements regarding the anticipated timing and cost of our AbioCor development activities, enhancements to be made to the BVS, planned expansion of our manufacturing and product development facilities, adequacy of existing resources and overcoming Year 2000 related issues. The Company's actual results, including our AbioCor development, BVS enhancements, facility expansion, adequacy of resources and overcoming Year 2000 issues may differ materially based on a number of factors, both known and unknown, including: uncertainty of product development and clinical trials, complex manufacturing, high quality requirements, unproven demonstration of required reliability of products under development, dependence on key personnel, risks associated with a growing number of employees, inability to recruit required human resources on schedule, competition and technological change, government regulations including the FDA and other regulatory agencies, reliance on government contracts, dependence on limited sources of supply, future capital needs and uncertainty of additional funding, dependence on third-party reimbursement, potential inadequacy of product liability insurance, dependence on patents and proprietary rights and other risks detailed in our Form 10-K for the year ended March 31, 1999 which was filed with the Securities and Exchange Commission. Investors are cautioned that all such statements involve risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 15 ABIOMED, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS No material change. Item 2. CHANGES IN SECURITIES None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 5. OTHER INFORMATION None Item 6. EXHIBITS AND REPORTS ON FORM 8-K a) EXHIBITS Exhibit 21 - Subsidiaries of the Registrant. Exhibit 27 - Financial Data Schedule. b) REPORTS ON FORM 8-K None 16 ABIOMED, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION - -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ABIOMED, Inc. Date: July 28, 1999 /S/ David M. Lederman -------------------------- David M. Lederman CEO and President Date: July 28, 1999 /S/ John F. Thero ----------------- John F. Thero Senior Vice President Finance and Treasurer Chief Financial Officer Principal Accounting Officer 17 EX-21 2 EXHIBIT 21 EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT SUBSIDIARY ORGANIZED UNDER LAWS OF ------------------- ----------------------------- ABIOMED Cardiovascular, Inc. Massachusetts ABIOMED R&D, Inc. Delaware Abiomed Research & Development, Inc. Massachusetts ABIODENT, Inc. Delaware ABD Holding, Inc. Delaware ABIOMED B.V. Netherlands Abiomed Limited Partnership Massachusetts EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED INCOME STATEMENT CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000815094 ABIOMED, INC. 3-MOS MAR-31-2000 APR-01-1999 JUN-30-1999 5,710,163 9,970,351 7,984,849 204,301 3,064,801 27,020,020 7,994,305 4,496,925 31,832,236 5,290,323 0 0 0 86,531 26,265,383 31,832,236 6,352,032 6,352,032 4,748,785 7,247,137 0 0 (157,082) 0 0 (738,023) 0 0 0 (738,023) (.09) (.09)
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