EX-99.1 2 v074272_ex99-1.txt VNUS Medical Technologies Reports First-Quarter 2007 Results: 11% unit growth in disposable catheters and devices $15.6 Million Net Revenues, $0.12 Net Loss Per Share SAN JOSE, Calif., May 9 /PRNewswire-FirstCall/ -- VNUS(R) Medical Technologies, Inc. (Nasdaq: VNUS), a leading provider of medical devices for the minimally invasive treatment of venous and peripheral vascular disease, today announced its financial results for the first quarter ended March 31, 2007. Net revenues for the first quarter were $15.6 million, after recognizing approximately $1.7 million in revenue related to RF generator sales previously deferred in 2006. This compares with $13.4 million for the first quarter of 2006 and with $13.3 million for the fourth quarter of 2006. The increase in net revenues from the prior quarter was due to higher RF generator revenues resulting from the recognition of sales previously deferred, the introduction of the ClosureFAST(TM) catheter and higher sales of the ClosureRFS(TM) family of devices, the U-Clip(TM) device and accessory products. These were partially offset by lower sales of the ClosurePlus(TM) catheter as customers began purchasing the ClosureFAST catheter in lieu of the ClosurePlus catheter. In addition, approximately $600,000 of RF generators sold without the upgraded software in 2006 and the first quarter of 2007 remain to be upgraded during the second quarter. First-quarter net loss was $1.9 million, compared with a net loss of $511,000 for the first quarter of 2006 and with a net loss of $2.0 million for the fourth quarter of 2006. Net loss per share for the first quarter was $0.12, compared with net loss per share of $0.03 for the first quarter of 2006 and with a net loss per share of $0.13 for the fourth quarter of 2006. VNUS' balance sheet at March 31, 2007 included cash, cash equivalents and short-term investments of $63.8 million, approximately $4.1 million less than the fourth quarter of 2006, due primarily to the first-quarter operating loss. "The big story for VNUS in the first quarter was the launch of the ClosureFAST catheter and the software that allows our installed base of systems to function with all VNUS disposable catheters and devices," said VNUS President and Chief Executive Officer Brian E. Farley. "Physician feedback on the ClosureFAST catheter and software has been very positive and the demand for the ClosureFAST catheter has exceeded our expectations causing us to increase manufacturing capacity to support current and expected future catheter demand. We are also pleased that upon receiving one-year follow-up data from the first patients treated in our clinical trial of the ClosureFAST catheter, all veins remain closed and with substantially increased sample size, we continue to see a greater than 99% vein occlusion rate at six months in this trial." VNUS also announced today its business outlook for the second-quarter and full-year 2007. Business Outlook VNUS currently estimates that second-quarter 2007 net revenues will range from approximately $15.5 million to $16.0 million, including $600,000 of deferred RF generator sales that are expected to be recognized in the quarter. Gross margin is expected to range from 63% to 65%. Second-quarter operating expenses are expected to increase by approximately $1.0 million from the first quarter of 2007, primarily due to sales and marketing expenses related to the direct-to-consumer television ad campaign, and increased research and development expenses. Second-quarter net loss is estimated to range from approximately $3.0 million to $3.5 million, or a loss of $0.20 to $0.23 per share. The number of weighted average shares outstanding used to calculate estimated loss per share for the second quarter is currently expected to range from approximately 15.2 million to 15.3 million. VNUS estimates that full-year 2007 net revenues will range from approximately $63.0 million to $65.0 million; gross margin is expected to range from 65% to 66%; operating expenses are expected to range from $53.0 million to $54.0 million, including patent litigation expenses of $2.5 million to $3.0 million. Full-year 2007 net loss is expected to range from approximately $8.0 million to $9.0 million, or a loss of $0.51 to $0.58 per share. This outlook assumes approximately 15.4 million to 15.6 million weighted average shares outstanding for the full year. Today's Teleconference VNUS plans to host its regular quarterly teleconference today at 2:00 p.m. PT / 5:00 p.m. ET. This call will be webcast live and as a replay on the company's website at http://ir.vnus.com/. A phone replay will be available for one week after the live call at (719) 457-0820, code number 7784586. About VNUS Medical Technologies, Inc. VNUS is a leading provider of medical devices for the minimally invasive treatment of peripheral vascular disease, including venous reflux, a progressive condition caused by incompetent vein valves in the leg. VNUS sells the Closure(R) system, which consists of a proprietary radiofrequency (RF) generator and proprietary disposable endovenous catheters and devices to treat diseased veins through the application of temperature-controlled RF energy. For more information, please visit the corporate website at www.vnus.com. Forward-Looking Statements In addition to statements of historical facts or statements of current conditions, VNUS has made forward-looking statements in this press release. Words such as "assumes", "expects" and "estimates," or variations of such words and similar expressions, are intended to identify such forward-looking statements in this press release, including the statements regarding the outlook for VNUS' business and revenue and net income forecasts. Actual results may differ materially from current expectations based on a number of factors affecting VNUS' business, including, among other things, changing competitive, market and regulatory conditions; our ability to manufacture sufficient quantities of the ClosureFAST catheter, and market acceptance of the ClosureFAST catheter; customer and physician preferences; changes in reimbursement levels established by governmental and third-party payors; the ability of VNUS to protect its patent position; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of strategic initiatives; and overall economic and market conditions. The reader is cautioned not to unduly rely on these forward-looking statements. VNUS expressly disclaims any intent or obligation to update these forward-looking statements except as required by law. Additional information concerning these and other risk factors can be found in press releases issued by VNUS and VNUS' periodic public filings with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K filed with the SEC on March 30, 2007. Copies of VNUS' press releases and additional information about VNUS are available on the corporate website at www.vnus.com. VNUS Medical Technologies, Inc. Condensed Consolidated Balance Sheets (in thousands) unaudited March 31, December 31, 2007 2006 --------- ------------ Assets Current assets: Cash and cash equivalents $ 35,241 $ 38,917 Short term Investments 28,534 28,996 Accounts receivable, net 10,702 8,246 Inventories 4,147 2,798 Prepaids and other current assets 1,705 1,443 Total current assets 80,329 80,400 Property and equipment, net 4,656 4,651 Other assets 195 782 Total assets $ 85,180 $ 85,833 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,974 $ 1,340 Accrued compensation and benefits 3,200 2,708 Other accrued liabilities 1,638 2,979 Deferred revenue 1,409 2,514 Total current liabilities 10,221 9,541 Other long term liabilities 1,741 1,544 Total liabilities 11,962 11,085 Stockholders' equity: Common stock 15 15 Additional paid-in capital 118,284 117,964 Deferred stock compensation (104) (144) Accumulated other comprehensive income (14) (5) Accumulated deficit (44,963) (43,082) Total stockholders' equity 73,218 74,748 Total liabilities and stockholders' equity $ 85,180 $ 85,833 VNUS Medical Technologies, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) unaudited Three Months Three Months Ended Ended March 31, March 31, 2007 2006 ------------ ------------ Net Revenues $15,649 $13,351 Cost of Revenues 5,094 3,917 10,555 9,434 Sales and marketing 6,505 5,978 Research and development 2,406 1,563 General and administrative 4,461 3,192 Total operating expenses 13,372 10,733 Loss from operations (2,817) (1,299) Interest income 868 591 Other income, net 5 124 Loss before income taxes (1,944) (584) Provision for income taxes 10 -- Net loss before cumulative effect of accounting change (1,954) (584) Cumulative effect of accounting change 73 73 Net loss after cumulative effect of accounting change $(1,881) $ (511) Net loss per share Basic Loss per share before cumulative change in accounting principle $ (0.13) $ (0.04) Cumulative effect of change in accounting principle $ 0.01 $ 0.01 Basic net loss per share $ (0.12) $ (0.03) Diluted Loss per share before cumulative change in accounting principle $ (0.13) $ (0.04) Cumulative effect of change in accounting principle $ 0.01 $ 0.01 Diluted net loss per share $ (0.12) $ (0.03) Weighted average number of shares used in per share calculations Basic 15,157 14,966 Diluted 15,157 14,966 SOURCE VNUS Medical Technologies, Inc. -0- 05/09/2007 /CONTACT: Tim Marcotte, Vice President, Finance and Administration, Chief Financial Officer of VNUS Medical Technologies, Inc., +1-408-360-7499, ir@vnus.com/ /First Call Analyst: / /FCMN Contact: / /Web site: http://www.vnus.com/