Eclipse Surgical Technologies Reports First Quarter 2001 Results, Completion of Private Financings

Apr 18, 2001, 01:00 ET from Eclipse Surgical Technologies Inc.

    SUNNYVALE, Calif., April 18 /PRNewswire/ -- Eclipse Surgical Technologies
 Inc. (Nasdaq:   ESTI) today reported results for its first quarter ended March
 31, 2001.  While revenues for this year's first quarter were lower year-to-
 year, the Company cut its operating loss to less than half (46 percent) of
 last year's first quarter operating loss by significantly reducing operating
 expenses.  Eclipse also slashed its cash burn rate in the first quarter of
 this year by 72 percent when compared to the year ago period.
     According to Eclipse President & CEO Michael J. Quinn, this year's first
 quarter was marked by the transformation of the Company to a new sales and
 marketing driven focus with the continued expansion and major revitalization
 of its sales, marketing and business development functions.   Eclipse also
 concentrated on its per-procedure revenue model and on increasing utilization
 of its lasers during the first quarter; saw the completion and reporting of
 preliminary results of a pioneering, randomized double blinded study for PTMR
 (percutaneous transmyocardial revasularization), the minimally invasive
 version of the Company's FDA cleared TMR laser procedure; and, towards the end
 of the quarter, raised $1 million in a placement of common stock with a
 private investor.  While implementing the needed changes in the sales
 organization has caused disruptions in sales, the Company believes these
 changes will propel the expansion of sales in upcoming quarters.
     Eclipse also reported that subsequent to the end of this year's first
 quarter it completed a $2 million private placement of common stock with the
 State of Wisconsin Investment Board, strengthening its March 31, 2001 cash
 balance.  In addition, the Company has secured a commitment for an asset-based
 line of credit of up to $5.0 million, which it expects will close within the
 next two weeks.
     Worldwide revenues in this year's first quarter, based on sales of
 disposables and lasers used to alleviate chest pain (angina) in patients
 suffering with coronary artery disease, were $3.1 million, with a net loss of
 $2.4 million, or an $0.08 loss per fully diluted share, a significant
 reduction from last year's first quarter net loss of $4.4 million, or a $0.15
 fully diluted loss per share.  For the first quarter of last year, while the
 Company's sales were based more heavily on the sale of the lasers systems,
 revenues were $5.7 million.  Sales for this year's first quarter were
 primarily from disposables used with the Company's proprietary lasers, which
 are now being placed in hospitals and medical centers and largely charged on a
 per-procedure basis for disposables, rather than on a complicated capital
 equipment purchase.
     At the end of the first quarter of 2000, there were 182 sites in the
 United States using Eclipse lasers for TMR and by the end of the first quarter
 of 2001, the number of U.S. sites had risen to 251, an increase of 38 percent.
 The number of surgeons trained to use Eclipse lasers for TMR at the end of
 this year's first quarter was 782, up 52 percent from the same period last
 year.
     Quinn commented, "While continuing on our mission to place TMR lasers at
 more locations and to empower more surgeons and interventional cardiologists
 worldwide, we have also continued to push forward with our innovative
 technology for the less invasive PTMR system."
     In March, widely recognized authority Dr. Jan Erik Nordrehaug, who chairs
 the Department of Heart Disease at University Hospital of Bergen, Norway and
 is a member of the advisory committee of the Norwegian Ministry of Health,
 presented favorable preliminary data from the first randomized, double-blinded
 study of PTMR at the American College of Cardiology (ACC) in Orlando.  The
 study, called BELIEF (Blinded Evaluation of Laser PTMR Intervention Electively
 For Angina Pectoris), showed by independent assessment that after six months
 patients who underwent the innovative catheter-based procedure were at least
 three times more likely to experience substantial relief from crippling chest
 pain called angina than those who received a sham procedure.
     Currently PTMR is not cleared by the FDA, and there can be no assurances
 given that the FDA will clear it.  The Company submitted data and filed a PMA
 (Pre Market Application) with the FDA in December 1999, seeking clearance to
 market the procedure, and believes that its submittal has substantial merit.
     Quinn further commented, "Today, Eclipse is a brand new company in many
 vital ways.  Our goal is to grow revenues and become profitable while
 balancing the need for sustainable growth with the challenges of a continuing
 cash burn.  We believe we are making substantial progress in reaching that
 goal.  Operating expenses in this year's first quarter were down $4.2 million,
 or 53 percent, from the same period last year and we cut the cash burn by
 $3.2 million, and will continue to cut from here as needed.  We are very
 pleased with the quality of the marketing and sales staff who have joined us
 over the last 4-5 months, and believe our approach to generating revenue on
 the per-procedure sale of disposables will stand the shareholders in good
 stead going forward."
     The Company streamlined its operations by reducing year-to-year headcount
 by 40 percent, and it reorganized its sales and marketing staff in this year's
 first quarter and hired 13 experienced sales professionals.  During the
 quarter, a new Vice President of Operations, Darrell Eckstein, as well as a
 new Vice President of Marketing, Christopher Owens, joined the management team
 and a number of area sales managers were put in place to strengthen the sales
 management function.
     The $3.0 million private placements of common stock included the purchase
 by the State of Wisconsin Investment Board of 2 million shares of common stock
 for $2 million in mid-April and the purchase of 898,202 shares of common stock
 by another investor at the end of this year's first quarter.  The asset-based
 line of credit of up to $5 million will be with CIT Business Credit.
     Following the just completed $2 million private placement of equity, the
 Company's March 31, 2001 balance sheet has been strengthened to now show on a
 pro forma basis cash and cash equivalents of $5.1 million, total assets of
 $16.1 million, and shareholders' equity of $8.5 million.
 
     About Eclipse Surgical Technologies
     Eclipse is a leading medical device company specializing in cardiac
 angiogenesis.  The Company currently manufactures and markets the Eclipse TMR
 2000, a solid-state laser system, as well as the Eclipse SoloGrip III, a
 surgical handpiece with built-in laser fiberoptics.  TMR is a laser heart
 treatment in which one-millimeter channels are created in the heart muscle and
 are believed to stimulate the growth of new blood vessels (angiogenesis).  TMR
 has been shown to reduce angina and improve the quality of life for patients
 suffering with coronary artery disease.
     For more information on the Company and its products, please visit the
 Eclipse web site at http://www.eclipsesurg.com or for investor information on
 Eclipse visit the Allen & Caron Inc website at www.allencaron.com.
     The forward-looking statements in this news release related to the
 Company's financial performance, sales and the adoption of its technology and
 products are based on current expectations and beliefs and are subject to
 numerous risks and uncertainties that could cause actual results to differ
 materially.  Other factors that could cause Eclipse's actual results to differ
 materially include the company's ability to:  successfully introduce and sell
 new products, to obtain adequate financing, to obtain regulatory approvals and
 market acceptance of current and future products, as well as additional risk
 factors, as discussed in the "Risk Factors" section of Eclipse's Annual Report
 on Form 10-K for the year ended December 31, 2000, and Eclipse's other recent
 SEC filings.  Eclipse disclaims any obligation to update any forward-looking
 statements as a result of developments occurring after the date of this press
 release.
 
 
                        ECLIPSE SURGICAL TECHNOLOGIES, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)
                                    (unaudited)
 
                                                         Three Months Ended
                                                             March 31,
                                                        2001           2000
 
     Net revenues                                      $3,111         $5,677
     Cost of revenues                                   1,535          2,332
      Gross profit                                      1,576          3,345
 
     Operating expenses:
      Research and development                            543          1,786
      Sales and marketing                               1,951          4,549
      General and administrative                        1,186          1,556
       Total operating expenses                         3,680          7,891
        Loss from operations                           (2,104)        (4,546)
     Interest income, net                                  25            107
     Equity in net loss of investee                      (357)            --
       Net loss                                       $(2,436)       $(4,439)
 
     Net loss per share --
      basic and diluted                                $(0.08)        $(0.15)
 
     Shares used in
      per share computations                           30,837         29,664
 
 
                        ECLIPSE SURGICAL TECHNOLOGIES, INC.
                            CONSOLIDATED BALANCE SHEETS
                                   (in thousands)
                                    (unaudited)
 
                                                   March 31, 2001
                                                      Pro Forma
                                                        with
                                                     completion
                                                    of April 12,
                                                    2001 private
                                         March 31,    placement  December 31,
                                            2001                     2000
 
     ASSETS
      Cash, cash equivalents &
       marketable securities                $3,142        $5,142      $3,357
      Accounts receivable, net               2,426         2,426       3,773
      Inventories                            5,007         5,007       5,400
      Property and equipment, net              966           966       1,048
      Other assets                           2,554         2,554       3,387
      Total assets                         $14,095       $16,095     $16,965
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
      Accounts payable and accrued
       liabilities                          $6,175        $6,250      $7,342
      Deferred revenue                       1,154         1,154       1,310
      Other liabilities                        224           224         339
      Total stockholders' equity             6,542         8,467       7,974
      Total liabilities and stockholders'
       equity                              $14,095       $16,095     $16,965
 
     For further information, please contact investors, Rob Weir, 212-691-8087,
 robw@allencaron.com, or Jane Creber, jane@allencaron.com, or media, Len Hall,
 len@allencaron.com, all of Allen & Caron Inc., 949-474-4300, for Eclipse
 Surgical Technologies Inc.
 
 

SOURCE Eclipse Surgical Technologies Inc.
    SUNNYVALE, Calif., April 18 /PRNewswire/ -- Eclipse Surgical Technologies
 Inc. (Nasdaq:   ESTI) today reported results for its first quarter ended March
 31, 2001.  While revenues for this year's first quarter were lower year-to-
 year, the Company cut its operating loss to less than half (46 percent) of
 last year's first quarter operating loss by significantly reducing operating
 expenses.  Eclipse also slashed its cash burn rate in the first quarter of
 this year by 72 percent when compared to the year ago period.
     According to Eclipse President & CEO Michael J. Quinn, this year's first
 quarter was marked by the transformation of the Company to a new sales and
 marketing driven focus with the continued expansion and major revitalization
 of its sales, marketing and business development functions.   Eclipse also
 concentrated on its per-procedure revenue model and on increasing utilization
 of its lasers during the first quarter; saw the completion and reporting of
 preliminary results of a pioneering, randomized double blinded study for PTMR
 (percutaneous transmyocardial revasularization), the minimally invasive
 version of the Company's FDA cleared TMR laser procedure; and, towards the end
 of the quarter, raised $1 million in a placement of common stock with a
 private investor.  While implementing the needed changes in the sales
 organization has caused disruptions in sales, the Company believes these
 changes will propel the expansion of sales in upcoming quarters.
     Eclipse also reported that subsequent to the end of this year's first
 quarter it completed a $2 million private placement of common stock with the
 State of Wisconsin Investment Board, strengthening its March 31, 2001 cash
 balance.  In addition, the Company has secured a commitment for an asset-based
 line of credit of up to $5.0 million, which it expects will close within the
 next two weeks.
     Worldwide revenues in this year's first quarter, based on sales of
 disposables and lasers used to alleviate chest pain (angina) in patients
 suffering with coronary artery disease, were $3.1 million, with a net loss of
 $2.4 million, or an $0.08 loss per fully diluted share, a significant
 reduction from last year's first quarter net loss of $4.4 million, or a $0.15
 fully diluted loss per share.  For the first quarter of last year, while the
 Company's sales were based more heavily on the sale of the lasers systems,
 revenues were $5.7 million.  Sales for this year's first quarter were
 primarily from disposables used with the Company's proprietary lasers, which
 are now being placed in hospitals and medical centers and largely charged on a
 per-procedure basis for disposables, rather than on a complicated capital
 equipment purchase.
     At the end of the first quarter of 2000, there were 182 sites in the
 United States using Eclipse lasers for TMR and by the end of the first quarter
 of 2001, the number of U.S. sites had risen to 251, an increase of 38 percent.
 The number of surgeons trained to use Eclipse lasers for TMR at the end of
 this year's first quarter was 782, up 52 percent from the same period last
 year.
     Quinn commented, "While continuing on our mission to place TMR lasers at
 more locations and to empower more surgeons and interventional cardiologists
 worldwide, we have also continued to push forward with our innovative
 technology for the less invasive PTMR system."
     In March, widely recognized authority Dr. Jan Erik Nordrehaug, who chairs
 the Department of Heart Disease at University Hospital of Bergen, Norway and
 is a member of the advisory committee of the Norwegian Ministry of Health,
 presented favorable preliminary data from the first randomized, double-blinded
 study of PTMR at the American College of Cardiology (ACC) in Orlando.  The
 study, called BELIEF (Blinded Evaluation of Laser PTMR Intervention Electively
 For Angina Pectoris), showed by independent assessment that after six months
 patients who underwent the innovative catheter-based procedure were at least
 three times more likely to experience substantial relief from crippling chest
 pain called angina than those who received a sham procedure.
     Currently PTMR is not cleared by the FDA, and there can be no assurances
 given that the FDA will clear it.  The Company submitted data and filed a PMA
 (Pre Market Application) with the FDA in December 1999, seeking clearance to
 market the procedure, and believes that its submittal has substantial merit.
     Quinn further commented, "Today, Eclipse is a brand new company in many
 vital ways.  Our goal is to grow revenues and become profitable while
 balancing the need for sustainable growth with the challenges of a continuing
 cash burn.  We believe we are making substantial progress in reaching that
 goal.  Operating expenses in this year's first quarter were down $4.2 million,
 or 53 percent, from the same period last year and we cut the cash burn by
 $3.2 million, and will continue to cut from here as needed.  We are very
 pleased with the quality of the marketing and sales staff who have joined us
 over the last 4-5 months, and believe our approach to generating revenue on
 the per-procedure sale of disposables will stand the shareholders in good
 stead going forward."
     The Company streamlined its operations by reducing year-to-year headcount
 by 40 percent, and it reorganized its sales and marketing staff in this year's
 first quarter and hired 13 experienced sales professionals.  During the
 quarter, a new Vice President of Operations, Darrell Eckstein, as well as a
 new Vice President of Marketing, Christopher Owens, joined the management team
 and a number of area sales managers were put in place to strengthen the sales
 management function.
     The $3.0 million private placements of common stock included the purchase
 by the State of Wisconsin Investment Board of 2 million shares of common stock
 for $2 million in mid-April and the purchase of 898,202 shares of common stock
 by another investor at the end of this year's first quarter.  The asset-based
 line of credit of up to $5 million will be with CIT Business Credit.
     Following the just completed $2 million private placement of equity, the
 Company's March 31, 2001 balance sheet has been strengthened to now show on a
 pro forma basis cash and cash equivalents of $5.1 million, total assets of
 $16.1 million, and shareholders' equity of $8.5 million.
 
     About Eclipse Surgical Technologies
     Eclipse is a leading medical device company specializing in cardiac
 angiogenesis.  The Company currently manufactures and markets the Eclipse TMR
 2000, a solid-state laser system, as well as the Eclipse SoloGrip III, a
 surgical handpiece with built-in laser fiberoptics.  TMR is a laser heart
 treatment in which one-millimeter channels are created in the heart muscle and
 are believed to stimulate the growth of new blood vessels (angiogenesis).  TMR
 has been shown to reduce angina and improve the quality of life for patients
 suffering with coronary artery disease.
     For more information on the Company and its products, please visit the
 Eclipse web site at http://www.eclipsesurg.com or for investor information on
 Eclipse visit the Allen & Caron Inc website at www.allencaron.com.
     The forward-looking statements in this news release related to the
 Company's financial performance, sales and the adoption of its technology and
 products are based on current expectations and beliefs and are subject to
 numerous risks and uncertainties that could cause actual results to differ
 materially.  Other factors that could cause Eclipse's actual results to differ
 materially include the company's ability to:  successfully introduce and sell
 new products, to obtain adequate financing, to obtain regulatory approvals and
 market acceptance of current and future products, as well as additional risk
 factors, as discussed in the "Risk Factors" section of Eclipse's Annual Report
 on Form 10-K for the year ended December 31, 2000, and Eclipse's other recent
 SEC filings.  Eclipse disclaims any obligation to update any forward-looking
 statements as a result of developments occurring after the date of this press
 release.
 
 
                        ECLIPSE SURGICAL TECHNOLOGIES, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)
                                    (unaudited)
 
                                                         Three Months Ended
                                                             March 31,
                                                        2001           2000
 
     Net revenues                                      $3,111         $5,677
     Cost of revenues                                   1,535          2,332
      Gross profit                                      1,576          3,345
 
     Operating expenses:
      Research and development                            543          1,786
      Sales and marketing                               1,951          4,549
      General and administrative                        1,186          1,556
       Total operating expenses                         3,680          7,891
        Loss from operations                           (2,104)        (4,546)
     Interest income, net                                  25            107
     Equity in net loss of investee                      (357)            --
       Net loss                                       $(2,436)       $(4,439)
 
     Net loss per share --
      basic and diluted                                $(0.08)        $(0.15)
 
     Shares used in
      per share computations                           30,837         29,664
 
 
                        ECLIPSE SURGICAL TECHNOLOGIES, INC.
                            CONSOLIDATED BALANCE SHEETS
                                   (in thousands)
                                    (unaudited)
 
                                                   March 31, 2001
                                                      Pro Forma
                                                        with
                                                     completion
                                                    of April 12,
                                                    2001 private
                                         March 31,    placement  December 31,
                                            2001                     2000
 
     ASSETS
      Cash, cash equivalents &
       marketable securities                $3,142        $5,142      $3,357
      Accounts receivable, net               2,426         2,426       3,773
      Inventories                            5,007         5,007       5,400
      Property and equipment, net              966           966       1,048
      Other assets                           2,554         2,554       3,387
      Total assets                         $14,095       $16,095     $16,965
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
      Accounts payable and accrued
       liabilities                          $6,175        $6,250      $7,342
      Deferred revenue                       1,154         1,154       1,310
      Other liabilities                        224           224         339
      Total stockholders' equity             6,542         8,467       7,974
      Total liabilities and stockholders'
       equity                              $14,095       $16,095     $16,965
 
     For further information, please contact investors, Rob Weir, 212-691-8087,
 robw@allencaron.com, or Jane Creber, jane@allencaron.com, or media, Len Hall,
 len@allencaron.com, all of Allen & Caron Inc., 949-474-4300, for Eclipse
 Surgical Technologies Inc.
 
 SOURCE  Eclipse Surgical Technologies Inc.