PLC Systems Reports Profitable Fourth Quarter -- Fourth Quarter
Revenues of $2.3 Million the Highest in 2004 -- FRANKLIN, Mass.,
March 3 /PRNewswire-FirstCall/ -- PLC Systems Inc. (AMEX: PLC), a
worldwide leader in cardiac laser technologies, today reported
financial results for the three months and year ended December 31,
2004. The Company also announced that it earned a quarterly profit
for the first time since the fourth quarter of 2003. Total revenues
for the fourth quarter of 2004 were $2,262,000 compared with
$2,335,000 for the fourth quarter of 2003. Fourth quarter net
income for the quarter ended December 31, 2004 increased by
$130,000 to $204,000, or $0.01 per share, compared to net income of
$74,000, or $0.00 per share, for the quarter ended December 31,
2003. Fourth quarter results were positively impacted by the
initial shipments of the Optiwave 980 Cardiac Laser Ablation
Systems to Edwards Lifesciences (NYSE:EW) as well as a $56,000
reduction in accrued liabilities for past clinical trial
obligations no longer deemed necessary. The fourth quarter of 2003
included a non-recurring charge of $257,000 related to the
liquidation of the Company's Swiss subsidiary. Total revenues for
the year ended December 31, 2004 were $7,573,000 compared to total
revenues of $8,334,000 for the year ended December 31, 2003. The
net loss for 2004 was $833,000, or $.03 per share, compared to net
income of $517,000, or $.02 per share, for the year ended December
31, 2003. During the year, PLC improved its cash position by
approximately $3.3 million and ended 2004 with cash and cash
equivalents totaling approximately $9.7 million. The improved cash
position resulted from a payment of $4.5 million from Edwards in
February 2004. "Throughout 2004 we continued to execute our
strategic plan to invest in new products that will address unmet
clinical needs in select cardiac and vascular related markets,"
stated Mark R. Tauscher, president and chief executive officer of
PLC Systems. "Our research and development initiatives serve as the
foundation to diversify and grow the Company's revenues beyond TMR.
The exclusive manufacturing rights to the Optiwave 980, PLC's first
strategic move to expand its product portfolio, were obtained
through a second partnership with Edwards in the first quarter of
this year. We are pleased to report that PLC's fourth quarter
results benefited from revenue generated from the initial shipments
of the Optiwave 980 lasers." PLC 2004 highlights include: * In the
first quarter, the Society of Thoracic Surgeons (STS) issued TMR
practice guidelines. * In the first quarter, PLC and Edwards
entered into an exclusive, multi year agreement to develop and
manufacture the Optiwave 980 Cardiac Laser Ablation System. * In
the first quarter, PLC and Edwards modified their existing TMR
relationship, which included lengthening the term of the
distribution agreement and adjusting the domestic TMR disposable
kit revenue sharing arrangement, in exchange for an upfront payment
of $4.5 million from Edwards to PLC. * In the third quarter,
Medicare Coverage Advisory Committee (MCAC) reviewed the clinical
data that supports the use of TMR. The agency has indicated that it
has no plans to alter the coverage policy. * In the fourth quarter,
PLC started manufacturing and shipping Optiwave 980 lasers to
Edwards to be used in clinical evaluations. * In the fourth
quarter, PLC generated a profit for the quarter. In the first
quarter of 2004, PLC and Edwards entered into an exclusive,
multi-year agreement to develop and manufacture the Optiwave 980
system. Edwards will market and distribute the Optiwave 980
worldwide. Currently, Edwards is performing ongoing clinical
evaluations of the Optiwave 980 system, which includes both lasers
and handpieces. During the initial evaluation phase Edwards
identified performance enhancement opportunities. Edwards and PLC
will implement and complete these enhancements before Edwards
initiates the full marketing launch for the Optiwave 980. During
2004 Edwards built an inventory of Optiwave 980 disposable
handpieces. Edwards believes that this inventory will be sufficient
to conduct the clinical evaluations. As a result, PLC now expects
to begin manufacturing Optiwave disposable handpieces in the second
half of 2005. Tauscher concluded, "Expanding our product portfolio,
growing our revenues, achieving sustainable profitability, and
increasing shareholder value are PLC's primary goals. During 2005
we will continue to invest in our new growth initiatives and we
expect these investments will keep us in a net loss position for
the year. We do believe these new initiatives will serve as the
catalyst for future revenue growth and profitability for PLC."
During the fourth quarter of 2004, six next-generation CO2 Heart
Lasers (HL2) were delivered to United States hospitals through
Edwards. PLC ended the fourth quarter of 2004 with 171 CO2 Heart
Lasers located at heart centers throughout the U.S., comprised of
124 HL2 customers and 47 HL1 customers. During the fourth quarter
of 2004, a total of 483 disposable kits were shipped to hospitals
worldwide. Edwards Lifesciences delivered 457 of these disposable
kits to United States hospitals and PLC shipped an additional 26
disposable kits to international hospitals. A total of 476
disposable kits were delivered worldwide during the fourth quarter
of 2003. In conjunction with announcing its fourth quarter results,
PLC Systems will be hosting a conference call today, March 3, at
11:00 a.m. Eastern Time. The call may be joined via telephone by
dialing (800)299-9630 at least five minutes prior to the start of
the call. The passcode is: 20899622. A live Webcast of the call
will be available and accessible at the investor relations section
of the Company's website at http://www.plcmed.com/. A recording of
the conference call will be available for the next month on PLC's
website. This press release contains "forward-looking" statements.
For this purpose, any statements contained in this press release
that relate to prospective events or developments are deemed to be
forward-looking statements. Words such as "believes,"
"anticipates," "plans," "expects," "will" and similar expressions
are intended to identify forward-looking statements. While we may
elect to update forward-looking statements in the future, we
specifically disclaim any obligation to do so, even if our
estimates change, and you should not rely on these forward-looking
statements as representing our views as of any date subsequent to
the date of this press release. Actual results could differ
materially from those indicated by such forward-looking statements
as a result of a variety of important factors, including we may be
unable to successfully develop new products in our efforts to
diversify beyond TMR, we may be unsuccessful in our efforts to
develop products under our new agreement with Edwards and Edwards
may be unsuccessful in distributing these products, operational
changes, competitive developments may affect the market for our
products, regulatory approval requirements may affect the market
for our products, we may be unable to convince health care
professionals and third party payers of the medical and economic
benefits of the CO2 Heart Lasers and the Optiwave 980 System, and
there can be no assurance that all payers will reimburse health
care providers who perform TMR procedures or that reimbursement, if
provided, will be adequate, and additional risk factors described
in our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004, and our other SEC reports. PLC SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per
share data) Three Months Ended Year Ended December 31, * December
31, * 2004 2003 2004 2003 Revenues: Product sales $1,876 $2,015
$5,982 $6,899 Placement and service fees 386 320 1,591 1,435 Total
revenues 2,262 2,335 7,573 8,334 Cost of revenues: Product sales
802 927 2,346 2,824 Placement and service fees 204 144 723 519
Total cost of revenues 1,006 1,071 3,069 3,343 Gross profit 1,256
1,264 4,504 4,991 Operating expenses: Selling, general and
administrative 587 719 3,329 3,297 Research and development 469 236
2,130 980 Total operating expenses 1,056 955 5,459 4,277 Income
from operations 200 309 (955) 714 Other income (expense):
Liquidation of subsidiary: Foreign currency loss - (257) - (257)
Other income, net 37 22 175 60 Income (loss) before income taxes
237 74 (780) 517 Provision for income taxes 33 - 53 - Net income
(loss) $204 $74 $(833) $517 Basic and diluted earnings (loss) per
share $0.01 $0.00 $ (0.03) $0.02 Average shares outstanding: Basic
30,062 29,860 30,025 29,826 Diluted 30,802 31,294 30,025 30,414
CONDENSED BALANCE SHEET December 31, December 31, 2003 * 2004 *
Cash and cash equivalents $9,678 $6,377 Total current assets 12,787
9,367 Total assets 13,327 9,849 Total current liabilities 2,129
1,962 Shareholders' equity 6,829 7,556 Contact: John Jordan
Director of Investor Relations 508-541-8800, ext. 145 DATASOURCE:
PLC Systems Inc. CONTACT: John Jordan, Director of Investor
Relations, +1-508-541-8800, ext. 145 Web site:
http://www.plcmed.com/
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