FOXH Foxhollow Technologies (MM)

Company Announces Conditional IDE Approval for the NightHawk Device, and Filing of RockHawk 510(k) REDWOOD CITY, Calif., Aug. 8 /PRNewswire-FirstCall/ -- FoxHollow Technologies, Inc. (NASDAQ:FOXH), which manufactures and markets minimally invasive devices for the treatment of peripheral artery disease (PAD), today announced results for the second quarter and first six months of fiscal 2007. For the quarter ended June 30, 2007, FoxHollow reported revenues of $50.6 million, a five percent increase over revenues of $48.2 million in the same period a year ago. Revenues for the quarter include $42.5 million in product sales and $8.1 million of research collaboration revenues related to the company's partnership with Merck & Co. Revenues in the second quarter of 2006 included product sales of $48.0 million and $216,000 from research collaboration activities. FoxHollow reported net income of $76,000, or $0.00 per diluted share, in the second quarter of 2007, compared with net income of $532,000, or $0.02 per diluted share, in the same period a year ago. The results for the second quarter of 2007 include $3.1 million in non-cash, stock-based compensation expense. This compares with stock-based compensation expense of $2.9 million in the same period a year ago. "We experienced solid gains in U.S. sales of our SilverHawk device compared to the first quarter of the year. Physicians have responded quite positively to our launch of the SilverHawk SXL, an enhanced device that utilizes our proprietary MEC(TM) technology, allowing for increased tissue collection capacity and in turn, reduced procedure time," said John Simpson, Ph.D., M.D., the company's founder and chief executive officer. "We are also excited to have achieved key milestones in our product development programs, which are integral elements of our strategy to grow the company. In the near term, we remain on track for the launch of the EXL device later this year, which is the next smaller SilverHawk in our 'XL series targeted at below-the-knee applications." Dr. Simpson noted. "Last week, we received conditional approval from the FDA of our IDE (Investigational Device Exemption) for our NightHawk Plaque Excision System that combines on-board imaging with our existing plaque excision technology. We have incorporated a number of significant enhancements into this device following our successful European study late last year. We have a number of sites that are completing the IRB process and look forward to initiating patient enrollment in the very near future," Dr. Simpson added. The company also said that during the quarter it filed a 510(k) with the FDA for approval of the RockHawk device, which is designed to treat calcified lesions, and expects FDA approval by the end of the year. For the six months ended June 30, 2007, FoxHollow reported revenues of $99.8 million versus revenues of $94.8 million in the same period a year ago. The company reported a net loss of $637,000 or $0.02 per share, versus a net loss of $14.1 million, or $0.57 per share, in the first six months of 2006. The results for the first six months of 2007 include $6.6 million in non-cash, stock-based compensation expense. This compares with stock-based compensation expense of $17.7 million in the same period a year ago, $11.4 million of which related to the retirement of the company's former chief executive officer. Recent Announcement of Merger On July 22, 2007 FoxHollow Technologies and ev3 Inc. (NASDAQ:EVVV) announced their entry into a definitive agreement by which the two companies will merge. This strategic combination is expected to provide the opportunity to achieve greater scale and realize significant cost and revenue synergies within the new company. The transaction is expected to close in the fourth quarter of 2007. Conference Call The company will hold a conference call today at 2 p.m., Pacific Daylight Time (5 p.m., Eastern Daylight Time). The teleconference can be accessed via the investor relations section of the company's website at http://investor.foxhollowtech.com/, or by calling 800-322-9079 (domestic) or 973-582-2717 (international). Please dial in or access the website 10-15 minutes prior to the beginning of the call. A replay of the conference call will be available approximately two hours after the conference call concludes through 12 a.m., Eastern Daylight Time, August 20, 2007, by dialing 877-519- 4471 (domestic) or 973-341-3080 (international), passcode 9076324. An online archive of the webcast will be available for a minimum of two months by accessing the investor relations portion of the company's website at http://investor.foxhollowtech.com/. About FoxHollow Technologies FoxHollow Technologies, Inc. develops and markets minimally invasive devices for the removal of plaque and thrombus for the treatment of peripheral artery disease (PAD). PAD results from plaque that accumulates in the arteries and blocks blood flow in the legs. These blockages can result in severe pain for patients and very limited physical mobility. The company's SilverHawk Plaque Excision System is a minimally invasive method of removing obstructive plaque and restoring blood flow to the legs and feet. The company's Rinspirator thrombectomy system removes thrombus, or blood clots, from occluded arteries in patients suffering from PAD or coronary artery disease (CAD). For more information, please visit our website at http://www.foxhollowtech.com/. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Statements in this press release regarding FoxHollow's business that are not historical facts may be "forward-looking statements" that involve risks and uncertainties. Specifically, statements regarding regulatory approval for our products, enrollment in our clinical trials, expectations regarding future product releases, the benefits expected from our merger with ev3 and the timing of the merger are forward-looking statements involving risks and uncertainties. FoxHollow's financial results for the second quarter 2007 and six months ended June 30, 2007, as discussed in this release, are preliminary and unaudited, and subject to adjustment. Forward-looking statements are based on management's current, preliminary expectations, and are subject to risks and uncertainties that could cause actual results to differ from the results predicted and which are included under the caption, "Risk Factors," in our most recent quarterly report on Form 10-Q for the quarter ended March 31, 2007, filed with the SEC on May 9, 2007, and available on our investor relations website at http://investor.foxhollowtech.com/ and on the SEC's website at http://www.sec.gov/. Undue reliance should not be placed on forward- looking statements, which speak only as of the date they were made. FoxHollow undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events. Contacts: Investor Relations Matt Ferguson Chief Financial Officer 650-421-8449 Media Relations Mike Ennen Vice President, Global Marketing 650-839-8066 FOXHOLLOW TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) June 30, December 31, 2007 2006 ---------- ----------- Assets Current assets: Cash and cash equivalents $38,682 $59,546 Short-term investments 130,982 107,369 Accounts receivable, net 19,977 19,450 Research collaboration receivable -- 2,826 Inventories 15,546 14,346 Prepaid expenses and other current assets 1,830 2,826 ---------- ----------- Total current assets 207,017 206,363 Property and equipment, net 10,825 8,328 Intangibles, net 11,326 12,116 Goodwill 19,251 19,186 Other assets 1,127 1,119 ---------- ----------- Total assets $249,546 $247,112 ========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $7,905 $9,385 Accrued liabilities 12,495 12,000 Deferred revenue, current 32,189 32,444 ---------- ----------- Total current liabilities 52,589 53,829 Deferred revenue -- 5,968 Other liabilities 1,972 1,166 ---------- ----------- Total liabilities 54,561 60,963 ---------- ----------- Stockholders' equity: Common stock 30 29 Additional paid-in capital 293,885 285,283 Deferred stock-based compensation (982) (1,866) Other comprehensive income 24 38 Accumulated deficit (97,972) (97,335) ---------- ----------- Total stockholders' equity 194,985 186,149 ---------- ----------- Total liabilities and stockholders' equity $249,546 $247,112 ========== =========== FOXHOLLOW TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) Three Months Ended, Six Months Ended, June 30, June 30, ------------------ ------------------ 2007 2006 2007 2006 -------- -------- -------- -------- Revenue: Product $42,509 $47,951 $83,615 $92,534 Research collaboration 8,111 216 16,222 2,280 -------- -------- -------- -------- Net revenue 50,620 48,167 99,837 94,814 -------- -------- -------- -------- Costs and expenses: Product 11,829 10,578 20,948 21,735 Research collaboration 2,175 708 4,277 1,828 Research and development 7,967 4,818 14,906 8,909 Selling, general and administrative 30,419 32,222 64,035 77,738 Amortization of purchased intangible assets 395 -- 790 -- -------- -------- -------- -------- Total costs and expenses 52,785 48,326 104,956 110,210 -------- -------- -------- -------- Loss from operations (2,165) (159) (5,119) (15,396) Interest and other income and expense, net 2,241 691 4,482 1,290 -------- -------- -------- -------- Net income (loss) $76 $532 $(637) $(14,106) ======== ======== ======== ======== Net income (loss) per common share: Basic $0.00 $0.02 $(0.02) $(0.57) ======== ======== ======== ======== Diluted $0.00 $0.02 $(0.02) $(0.57) ======== ======== ======== ======== Weighted-average number of shares used in per common share calculations: Basic 29,546 24,847 29,433 24,581 ======== ======== ======== ======== Diluted 29,853 25,807 29,433 24,581 ======== ======== ======== ======== DATASOURCE: FoxHollow Technologies, Inc. CONTACT: Investor Relations, Matt Ferguson, Chief Financial Officer, +1- 650-421-8449, , or Media Relations, Mike Ennen, Vice President, Global Marketing, +1-650-839-8066, , both of FoxHollow Technologies, Inc. Web site: http://www.foxhollowtech.com/ http://investor.foxhollowtech.com/

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