Cardiogenesis Corporation (Cardiogenesis), a US-based developer and distributor of laser-based surgical products, has reported net revenues of $2.2 million for the second quarter of 2009, down 46%, compared with the net revenues of $4.1 million in the year-ago quarter. It has also reported a net loss of $590,000, or $0.01 loss per share, for the second quarter of 2009, compared with the net income of $602,000 or $0.01 per share, in the year-ago quarter.
The decrease in net revenue for the three months ended June 30, 2009 results primarily from the absence of laser sales in the current year quarter.
Net revenues in the first six months of 2009 totaled $5,088,000, a decrease of approximately 28% from net revenues of $7,101,000 in the first six months of 2008. The year to date decrease as compared with the prior year period is primarily attributable to a $1,459,000, or 66%, decrease in laser sales and a $635,000, or 15%, decrease in disposable handpiece revenue.
Paul McCormick, Executive Chairman, noted, Although we face a very challenging capital equipment environment, we are pleased to note that total domestic handpiece revenue was up sequentially, which we believe to be an early response to our marketing strategy to focus on building the revenue stream from its consumables by re-engaging the cardiology community. We plan on providing more detail on our growth strategies on today’s conference call.
The net loss for the quarter was $590,000 or $0.01 per basic and diluted share, as compared with net income of $602,000, or $0.01 per basic and diluted share in the 2008 second quarter.
For the first six months of 2009, Cardiogenesis reported an operating loss of $859,000 as compared with operating income of $545,000 for the same period in the prior year. The net loss for the first six months of 2009 was $904,000, or $0.02 per basic and diluted share, compared with net income of $566,000, or $0.01 per basic and diluted share, for the first six months of 2008.
The gross margin percentage was 83% of net revenues for the quarter ended June 30, 2009 as compared with 86% in the second quarter of 2008. Gross profit in absolute dollars decreased by $1,684,000 to $1,845,000 for the current year second quarter as compared with $3,529,000 for the 2008 second quarter.
For the six months ended June 30, 2009, the gross margin percentage was 82% of net revenues as compared to 84% for the six months ended June 30, 2008. Gross profit in absolute dollars decreased by $1,825,000 to $4,161,000 for the six months ended June 30, 2009, as compared to $5,986,000 for the six months ended June 30, 2008. The decrease in the gross margin percentage and gross profit in dollars for the six month period is primarily attributed to a decrease in laser sales.
Research and development expenses were $346,000 in the second quarter of 2009 as compared with $252,000 in the 2008 second quarter. Year to date, R&D expenses of $634,000 were $166,000 or 35% above the prior year period of $468,000. The dollar increase for the three and six months ended June 30, 2009 was primarily attributed to the recent submissions to the Food and Drug Administration related to the Premarket Approval Application for the PEARL 8.0 handpiece and the pre-Investigational Device Exemption to initiate a feasibility trial for the PHOENIX handpiece.
Sales and marketing expenses of $1,272,000 in the quarter ended June 30, 2009 decreased $523,000, or 29%, compared with $1,795,000 for the quarter ended June 30, 2008. For the six months ended June 30, 2009, S&M expenditures totaled $2,741,000, a decrease of $581,000, or 17%, compared with $3,322,000 for the six months ended June 30, 2008. The decrease in sales and marketing expenditures for the three and six months ended June 30, 2009 was primarily due to a decrease in salary and other employee related expenses as a result of lower commissions and decreased travel expense.
General and administrative expenses for the quarter ended June 30, 2009 totaled $789,000 as compared to $900,000 during the quarter ended June 30, 2008. This represents a decrease of $111,000, or 12%. For the six months ended June 30, 2009, G&A totaled $1,645,000 as compared to $1,651,000 for the six months ended June 30, 2008. This represents a reduction of $6,000, or less than 1%.