Conference Call Scheduled for Today,
Key Financial and Operating Highlights for the Fourth Quarter:
The company’s fourth-quarter revenues grew to
CSI’s fiscal 2014 fourth-quarter net loss was
Fiscal year 2014 revenues increased to
“We are pleased with the early adoption of our new Diamondback 360® 60cm Peripheral OAS, designed for tibiopedal access. Additionally, the controlled launch of our coronary system continued to gain traction during the fourth quarter, growing revenue by over 90 percent from the third quarter of this year, with more than 800 units sold.”
Continued Rollout of Diamondback 360® Coronary Orbital Atherectomy System (OAS)
During the fourth quarter, CSI continued the controlled commercial launch of its Diamondback 360® Coronary Orbital Atherectomy System (OAS), with a small team of dedicated coronary sales representatives in
Diamondback 360® 60cm OAS Launch
In March, CSI secured
According to Martin, “This device further demonstrates the unique capabilities of our orbital technology and CSI’s commitment to provide physicians new options for treating the most difficult patients. Products like the low-profile, tibiopedal device expand the market by treating severely ill patients who were previously underserved.”
First Patients Enrolled in COAST Study
In June, the company announced that the first patient was enrolled in its Coronary Orbital Atherectomy System Trial (COAST) trial. Taking place in
According to Martin, “COAST is an important trial for CSI as we seek to simultaneously demonstrate that our second generation Coronary OAS is safe and effective and improves economic outcomes in a very sick patient population. If successful, this trial may also help secure commercial approval in
Fiscal 2015 First-Quarter Outlook
For the fiscal 2015 first quarter ending
Concluded Martin, “As we look to fiscal 2015, our top priorities are to continue achieving high growth in PAD—expanding that market with our unique, low-profile orbital technology and wealth of clinical data—and successfully broadening our commercial launch in the CAD market. Our ability to expand these markets by treating previously underserved patients is expected to drive adoption of our systems, providing continued attractive growth for CSI.”
Conference Call Today at
For an audio replay of the conference call, dial (888) 286-8010 and enter access number 33941614. The audio replay will be available beginning at
Use of Non-GAAP Financial Measures
To supplement CSI's 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 CSI's financial results prepared in accordance with GAAP.
About Peripheral Artery Disease (PAD)
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 orbital atherectomy utilizing the Stealth 360and Diamondback 360 Peripheral Orbital Atherectomy Systems, minimally invasive catheter systems developed and manufactured by CSI. These systems use a diamond-coated crown, attached to an orbiting shaft, which sands away plaque while preserving healthy vessel tissue — 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 Coronary Artery Disease (CAD)
CAD is a life-threatening condition and a leading cause of death in men and women in
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) the coronary launch strategy and timeline; (ii) expanded adoption and usage of CSI’s coronary technology by prominent hospitals and physicians; (iii) CSI’s new Diamondback 360® 60cm Peripheral OAS device; (iv) the COAST trial, including the number of patients expected to be enrolled, and the potential to secure commercial approval in
The Stealth 360® PAD System, Diamondback 360® PAD System and Predator 360® 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.
Indications: The Diamondback 360® Coronary Orbital Atherectomy System (OAS) is a percutaneous orbital atherectomy system indicated to facilitate stent delivery in patients with coronary artery disease (CAD) who are acceptable candidates for PTCA or stenting due to de novo, severely calcified coronary artery lesions.
Contraindications: The OAS is contraindicated when the ViperWire guide wire cannot pass across the coronary lesion or the target lesion is within a bypass graft or stent. The OAS is contraindicated when the patient is not an appropriate candidate for bypass surgery, angioplasty, or atherectomy therapy, or has angiographic evidence of thrombus, or has only one open vessel, or has angiographic evidence of significant dissection at the treatment site and for women who are pregnant or children.
Warnings/Precautions: Performing treatment in excessively tortuous vessels or bifurcations may result in vessel damage; The OAS was only evaluated in severely calcified lesions, A temporary pacing lead may be necessary when treating lesions in the right coronary and circumflex arteries; On-site surgical back-up should be included as a clinical consideration; Use in patients with an ejection fraction (EF) of less than 25% has not been evaluated. See the instructions for use before performing Diamondback 360Coronary OAS procedures for detailed information regarding the procedure, indications, contraindications, warnings, precautions, and potential adverse events. For further information call CSI at 1-877-274-0901 and/or consult CSI’s website at www.csi360.com.
Caution: Federal law (
Micro Crown OAS
CSI has commenced its COAST Investigational Device Exemption clinical trial to evaluate the safety and effectiveness of its new micro crown orbital technology in treating coronary arteries. This new system is limited by federal law to investigational use and is currently not commercially available in
|Consolidated Statements of Operations|
|(Dollars in Thousands)|
|Three Months Ended||Year Ended|
|Cost of goods sold||9,115||6,929||31,041||24,382|
|Selling, general and administrative||33,727||24,627||117,994||86,718|
|Research and development||6,276||3,946||21,066||15,216|
|Loss from operations||(9,554||)||(6,681||)||(33,489||)||(22,419||)|
|Interest and other, net||(74||)||(160||)||(1,801||)||(1,618||)|
|Net loss and comprehensive loss||$||(9,628||)||$||(6,841||)||$||(35,290||)||$||(24,037||)|
|Net loss and comprehensive loss per common share:|
|Basic and Diluted||$||(0.31||)||$||(0.28||)||$||(1.25||)||$||(1.11||)|
|Weighted average common shares used in computation:|
|Basic and Diluted||30,959,038||24,181,465||28,295,758||21,685,932|
|Consolidated Balance Sheets|
|(Dollars in Thousands)|
|Cash and cash equivalents||$||126,592||$||67,897|
|Accounts receivable, net||21,383||14,730|
|Prepaid expenses and other current assets||1,846||959|
|Total current assets||162,711||89,829|
|Property and equipment, net||15,297||2,999|
|Debt conversion option and other assets||70||850|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Deferred grant incentive||59||156|
|Total current liabilities||29,729||22,413|
|Long-term debt, net of current maturities||-||7,472|
|Total long-term liabilities||117||7,652|
|Commitments and contingencies|
|Total stockholders' equity||152,055||66,832|
|Total liabilities and stockholders' equity||$||181,901||$||96,897|
|Supplemental Sales Information|
|(Dollars in Thousands)|
|Three Months Ended||Year Ended|
|Total device revenue||34,906||25,375||120,414||91,238|
|Other product revenue||4,658||3,446||16,198||12,659|
|Device units sold:|
|Total device units sold||11,347||8,138||39,258||28,948|
|Reorder revenue %||98||%||96||%||97||%||97||%|
Non-GAAP Financial Measures
To supplement CSI's 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 on the next page. In addition, an explanation of the manner in which CSI's management uses Adjusted EBITDA to conduct and evaluate its business, the economic substance behind management's 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.
|(Dollars in Thousands)|
|Three Months Ended||Year Ended|
|Loss from operations||$||(9,554||)||$||(6,681||)||$||(33,489||)||$||(22,419||)|
|Add: Stock-based compensation||3,246||2,126||10,928||7,442|
|Add: Depreciation and amortization||387||285||1,369||973|
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. CSI's management uses Adjusted EBITDA to analyze the underlying trends in CSI's business, assess the performance of CSI's core operations, establish operational goals and forecasts that are used to allocate resources and evaluate CSI's performance period over period and in relation to its competitors' operating results. Additionally, CSI's 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 CSI's management for its financial and operational decision-making and allows investors to see CSI's results "through the eyes" of management. CSI also believes that providing this information better enables CSI's investors to understand CSI's operating performance and evaluate the methodology used by CSI's 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. CSI's management also believes that excluding this item from CSI's non-GAAP results is useful to investors to understand the application of stock-based compensation guidance and its impact on CSI's operational performance, liquidity and its ability to make additional investments in the company, and it allows for greater transparency to certain line items in CSI's 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 CSI's management to assess the core profitability of CSI's business operations. CSI's management also believes that excluding these items from CSI's non-GAAP results is useful to investors to understand CSI's 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 CSI's financial results prepared in accordance with GAAP. Some of the limitations associated with CSI's use of these non-GAAP financial measures are:
-- Items such as stock-based compensation do not directly affect CSI's cash flow position; however, such items reflect economic costs to CSI and are not reflected in CSI's "Adjusted EBITDA" and therefore these non-GAAP measures do not reflect the full economic effect of these items.
-- 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.
-- CSI's 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.