Allen & Caron Inc
Mike Mason (investors)
Len Hall (media) Darrell Eckstein, President
CARDIOGENESIS CORPORATION REPORTS THIRD QUARTER, NINE-MONTH RESULTS
Gross Margins Remain Strong, Revenue Up Sequentially From Second Quarter 2002
FOOTHILL RANCH, CA (October 24, 2002) . . . CardioGenesis Corporation (Nasdaq: CGCP), the
market leader in angina-relieving Transmyocardial Revascularization (TMR) and Percutaneous
Myocardial Revascularization (PMR), today announced results for its third quarter and first nine
months ended September 30, 2002. Chairman and CEO Michael J. Quinn said that revenue in the
2002 third quarter grew 7 percent from the second quarter of this year and gross margins in the third
quarter remained strong at 78 percent, up significantly from 61 percent in the same period last year.
In addition to a significant reduction in net loss, this year's third quarter was also highlighted by the
progress the Company made on the Pre Market Application (PMA) amendment it filed with the
U.S. Food and Drug Administration (FDA) for PMR on July 1 of this year.
"Our sales team in the field and the thought leaders among our users are telling us that there
is an increasing rate of adoption of TMR in our installed base and an expanding interest in this life
enhancing procedure among cardiac surgeons," Quinn said. "I believe the impact of the increasing
interest in TMR and the inherent sales leverage we can derive from improved utilization in our
market leading installed base will become evident in future quarters. As expected, our procedure
volume in this year's third quarter, as measured by hand piece sales, declined in the traditionally
slow summer months, when compared to levels in the second quarter of this year; however, we have
made good progress throughout the Company and believe we are well positioned to meet our goals
of future profitability and increasing shareholder value."
Revenues in the third quarter of this year were $3.2 million, compared to $4.2 million in the
third quarter of last year with the Company reporting a net loss in the 2002 third quarter of
$576,000, or a $0.02 fully diluted loss per share, which included the effects of a $684,000 reduction
of accrued liabilities established in prior periods for research and development costs associated with
estimated clinical trial obligations. The net loss in the third quarter of 2001 was $2.5 million, or a
$0.07 fully diluted loss per share. Total operating expense in this year's third quarter without the
effect of the reduction of accruals increased by approximately 8 percent from the second quarter of
2002 principally due to additional expenses associated with work done by the Company's
regulatory group to gain FDA approval for the U.S. marketing of PMR.
Excluding the effect of the reduction of accruals, the loss from operations in this year's third
quarter was cut almost in half to $1.3 million, down from $2.5 million in the 2001 third quarter.
Last year's third quarter results included $442,000 in restructuring charges.