Angeion fourth quarter revenues increase 22% to $8.4 million

Angeion CorporationDec 16 2011

Angeion Corporation (NASDAQ: ANGN) today reported financial results for its fourth quarter and fiscal year ended October 31, 2011.

Fourth Quarter Highlights:

• Revenues of $8.4 million comparable to the fourth quarter of 2010, sequentially up 22% from the third quarter;
• Service revenue improved 33% to $1.2 million, compared to $888,000 in last year's fourth quarter;
• GPO (group purchasing organization) revenue during the fourth quarter increased 146% to $1.6 million, compared to $650,000 in the comparable quarter;
• Gross margin for the fourth quarter remained solid at 56.5%;
• International sales increased to $1.6 million, a 12% increase over the prior year's fourth quarter; and
• Strong balance sheet with $9.2 million in cash and investments and no long-term debt.

Angeion reported revenue of $8.4 million compared to $8.5 million in the fourth quarter of fiscal 2010. Angeion reported net income of $391,000, or $0.10 per diluted share, versus net income of $410,000, or $0.10 per diluted share, in the comparable quarter last year. Sequentially, revenues in the fourth quarter increased 22% from $6.8 million in the third quarter of fiscal 2011.

Gross margin for the quarter improved to 56.5% compared to the 56.1% gross margin in the fourth quarter of fiscal year 2010. General and administrative expenses in the fourth quarter of fiscal 2011 decreased 13.4% primarily due to the absence of severance and related one-time expenses in the fourth quarter of fiscal 2010. Management will continue to examine operating expenses going forward to maintain profitability. Sales and marketing expenses decreased 3.4% compared to the fourth quarter of fiscal 2010 while research and development costs increased 33.2% as management dedicated additional resources to advance software and hardware development initiatives to enhance current product offerings and develop future new products.

Gregg O. Lehman, Ph.D., president and chief executive officer of Angeion Corporation commented, "The results of the fourth quarter are gratifying. On a sequential basis, total revenues increased 22% and service revenues increased 33% year-over-year, as we continue to emphasize to our customers the importance of maintaining the highest level of efficiency possible. We are particularly pleased with the traction that we are beginning to gain with our GPO (group purchasing organization) partners. Sales from that channel increased 146%, representing 19% of total sales for the quarter versus 8% of total sales in last year's comparable quarter. We believe that in the coming years GPO channel sales will be a positive contributor in smoothing out some of the 'lumpiness' that has historically characterized our revenue stream over the course of our fiscal year. We achieved measurable progress during the quarter that made a meaningful contribution to the results of the fiscal year. We look forward to maintaining that trend in the new fiscal year as we work to rebrand the company as a leading-edge medical technology provider."

Fiscal Year 2011 Financial Results
For the fiscal year ended October 31, 2011, Angeion reported revenues of $29.1 million, as compared to revenues of $29.0 million for the prior year. Angeion reported a net loss of $152,000, or $(0.04) per diluted share versus a net loss of $849,000, or $(0.21) per diluted share in the prior year. Financial results for the year were impacted by severance charges and associated legal and consulting fees attributable to the departure of executive officers. Severance and related one-time items incurred in fiscal 2011 totaled approximately $614,000, or $0.16 per diluted share, compared to one-time items of approximately $450,000, or $0.11 per diluted share in fiscal 2010.

Gross margin for the fiscal year improved to 56.9% compared to the 54.4% gross margin in fiscal year 2010 primarily due to lower factory and technical service costs. General and administrative expenses for the fiscal year decreased 4.8% versus the prior year as a result of administrative staff changes. Sales and marketing expenses increased 2.9% compared to fiscal 2010 while research and development costs increased 1.5% for the year.

Regarding fiscal year 2011, Dr. Lehman said, "We are pleased with the progress that has been achieved in the two quarters since our new management team was installed.  Our initial focus has been to stabilize the business and to manage costs. While revenues for the year were essentially flat, our cost of revenues decreased 5.5% and our gross margin for the year increased 255 basis points. Service revenues for the year increased 18.3% to $4.1 million, the highest in the history of the company, and we cut general and administrative expenses by approximately 5%. Excluding the severance and related one-time items, we were able to achieve profitability for the full year, which sets the stage for a productive fiscal 2012."

Dr. Lehman continued, "We move into the new fiscal year with a strong cash position and no short or long-term debt. We also have a net operating loss carry forward of approximately $15.9 million of which use is contingent upon the Company's future profitability and is fully reserved. More importantly, we are executing on a new strategic plan that includes upgrading our current product lines, developing new products, both internally and with strategic partners, and entering new markets where our products are ideally suited to drive improved patient outcomes and cost efficiencies. We have identified the primary care, cardiology and the sleep disorder markets as potential opportunities for future entry. These are large and growing market segments that we believe will benefit from our current and new technology offerings, and that will guide our discussions with future potential partners. We are excited with the many opportunities ahead for the 'new' Angeion."

Balance Sheet
As of October 31, 2011, the Company ended fiscal 2011 with cash, equivalents and short term investments totaling $9.2 million, no long-term debt and shareholders' equity of $14.3 million. For the year, the Company repurchased a total of approximately 46,000 shares of Angeion common stock in the open market for $198,000. Under the current stock repurchase program, the Company has the authorization to purchase an additional $2.8 million worth of stock.