Angeion Corporation (Angeion), a cardiovascular devices company, has reported revenues of $6.4 million for the first quarter of fiscal 2009, compared with the revenues of $7.5 million in the year-ago quarter. It also reported a net loss of $0.62 million, or $0.15 per diluted share, for the first quarter of fiscal 2009, compared with the net loss of $0.67 million, or $0.17 per diluted share, in the year-ago quarter.
Angeion’s 2009 first-quarter revenues decreased $501,000 from the 2008 first quarter due to the previously announced conclusion of a customer’s nonrecurring clinical trial program. Additionally, first-quarter revenue was severely impacted by lower capital spending in hospitals due to the overall economic downturn.
While fiscal 2009 first-quarter revenues decreased by $1.1 million from fiscal 2008 first-quarter revenues of $7.5 million, Angeion’s net loss improved by $53,000, or $0.02 per diluted share. This gain stemmed from stronger gross margin and significantly lower operating expenses resulting from cost-reduction initiatives implemented throughout fiscal 2008.
The company’s gross margin rose to 51.3% in the fiscal 2009 first quarter, up from 50.3% in the year-ago period. The increase was primarily due to a slightly improved mix of higher-margin service revenue.
“Like the majority of companies, we’re experiencing the challenges of today’s global economic environment. Slowdowns in hospital orders, delayed capital projects, and cuts in capital and operating budgets, resulted in softer-than-anticipated top-line performance,” said Rodney A. Young, Angeion’s President and Chief Executive Officer. “The economy’s impact was especially felt in our domestic hospital market, where established and financially sound medical centers postponed implementing their capital purchases. That said, we are keenly focused on those activities that we can control, including prudent management of operating expenses, improving margins and maximizing our opportunity within our international markets.”
“We’re encouraged that our international market delivered year-over-year growth of 4.0%. We believe this is a direct result of the experienced international distribution partners we have supporting Angeion’s Medical Graphics product line. For our international markets we are developing small, more affordable products, as well as providing targeted programs and marketing support,” stated Young.
From a cash flow statement perspective, Angeion reported $424,000 in negative operating cash flow in the first quarter of fiscal 2009 due to the net loss for the period, partially offset by the add back of non-cash expenses. Cash on hand at January 31, 2009, was $8.7 million, compared to $6.5 million at the end of the fiscal 2008 first quarter. Cash on hand at February 24, 2009 was $9.0 million. The company has no debt.
“With a strong cash position, we are exploring several opportunities to enhance performance and expand our capabilities,” said Young.
Looking Ahead For 2009 And Beyond
According to Young, Angeion’s strategy is to drive revenue growth and improve profitability in both its U.S. and international markets. These strategic priorities remain unchanged and reflect the company’s focus on investing for growth and profitability despite the challenging economic times. Specifically, Angeion’s goals are to:
Continue to drive expansion into international markets—which, excluding non-recurring clinical research business in the fiscal 2008 first quarter, increased on a year-over-year basis by 4.0%;
Launch additional new products, beyond the successful 2009 first-quarter introduction of the company’s new and improved CCM-Express. This improved version positions the CCM-Express not only for critical care management, but for cardiology, oncology and other significant markets;
Pursue continued acceptance of New Leaf health and fitness products with strong business partnerships such as the one currently in place with Garmin Ltd.;
Drive market awareness of New Leaf products through trade show participation and other marketing activities. New Leaf will be exhibiting at the International Health, Racquet & Sportsclub Association (IHRSA) convention and tradeshow being held in San Francisco on March 17-19 at booth 124;
Enhance the company’s international distribution channel—recent expansion includes new distribution relationships in Canada, Europe and China;
Complete the roll-out of a newly established technology sharing and co-distribution relationship with a European diagnostic equipment company; and
Continue cost-management initiatives to further increase gross margins and lower operating expenses. This will be a high priority as the company aggressively works to weather the economic downturn.
In addition, as we announced in our fourth quarter fiscal 2008 press release, the company has developed a market-focused approach to leverage the strength of its MedGraphics brand and worldwide selling and distribution capability. Specifically, the company has held discussions with various potential product and technology partners. We are continuing to look at a number of these opportunities, but currently have no agreements or understandings with any of these third parties.
Concluded Young, “For almost three decades customers have demonstrated great acceptance and confidence in our global brands, and we are confident this will continue. We believe that with our 24/7 market vigilance and agile approach to customer preferences and market trends, we will successfully navigate through the current environment. Moreover, Angeion’s leading-edge products, technologies and programs, experienced team, distribution channels, overall market presence, and balance sheet, position us to thrive when the inevitable economic rebound arrives.”