Fiscal Year 2010 Financial Outlook

For the fiscal 2010, the company forecasts total revenues to be in the range of $80 million to $85 million. This guidance reflects no sales in China and currency exchange rates similar to those at the end of fiscal year 2009. The company forecasts to report profitability for the full fiscal year of 2010.

Net income for the Q4 fiscal 2009 was $0.6 million, or $0.04 per fully diluted share on 16.1 million weighted-average shares outstanding, and included $1.3 million, or $0.08 per fully diluted share, of non-cash stock-based compensation expense. The net loss for the Q4 fiscal 2008 was $6.2 million, or $0.40 per share on 15.6 million weighted-average shares outstanding, and included $1.5 million, or $0.09 per share, of non-cash stock-based compensation expense.

We met our fiscal 2009 revenue guidance despite currency challenges and closed the year with our first profitable quarter. At the same time we were able to increase our cash position by $3.0 million during the quarter because of revenue growth and expense management, said John Kilcoyne, Chairman and CEO of Micrus Endovascular Corporation. We continue to see strong revenue growth from new products introduced in the past twenty-four months and increasing sales of non-embolic products.

As we look forward to fiscal 2010 and beyond, we remain encouraged by the significant clinical and revenue opportunities that remain for the treatment of hemorrhagic and ischemic stroke. In fiscal 2010 we expect to achieve profitability for the full year while continuing to expand our product portfolio and our geographic reach, he added.

Fiscal Fourth Quarter Financial Results

Gross margin for the Q4 fiscal 2009 was 72%, compared with 73% in the Q4 fiscal 2008. The decrease was primarily due to a higher proportion of sales to distributors with lower average selling prices.

Research and development expenses for the Q4 fiscal 2009 were $2.0 million, compared with $3.6 million for the comparable prior-year period. The decrease was due mainly to a $0.9 million charge associated with the acquisition of thrombectomy technologies from Genesis Medical Interventional, Inc. in the Q4 fiscal 2008 and a decrease in outside services in the Q4 fiscal 2009.

Sales and marketing expenses for the Q4 fiscal 2009 were $6.3 million, compared with $8.6 million for the Q4 fiscal 2008. The decrease was due primarily to lower personnel costs, a decrease in consulting fees and a reduction in general marketing expenses, including travel and trade shows.

General and administrative expenses for the Q4 fiscal 2009 were $5.2 million, compared with $8.6 million for the comparable prior-year period. The decrease is due primarily to a $3.0 million reduction in legal and professional fees related to the U.S. Department of Justice monitorship, which was concluded in the second quarter of fiscal 2009.

An impairment charge of $462,000 was recorded in the Q4 fiscal 2009 related to the intangible assets from the acquisition of Neurologic U.K. Limited in September 2005 as a result of the decline in the estimated fair value.

Other expense, net, of $422,000 for the Q4 fiscal 2009 was primarily due to foreign exchange losses arising from the remeasurement of foreign currency transactions. This compares with other income, net, of $61,000 for the Q4 fiscal 2008.

Fiscal Year 2009 Financial Results

Gross margin for fiscal 2009 was 73%, compared to 75% in fiscal 2008. Operating expenses for fiscal 2009 were $67.0 million, compared with $70.1 million in fiscal 2008.

As of March 31, 2009, Micrus had cash and cash equivalents of $17.1 million, stockholders’ equity of $42.6 million and working capital of $24.3 million. Micrus has a revolving line of credit with Wells Fargo Bank that provides for maximum borrowings of $15.0 million with a maturity date of February 1, 2010. As of March 31, 2009, Micrus had outstanding borrowings of $2.5 million under the line of credit, unchanged from December 31, 2008.