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Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 12, 1998 (October 15, 1998)
ARTERIAL VASCULAR ENGINEERING, INC.
(Exact name of registrant as specified in its charter)
0-27802
(Commission File Number)
Delaware 94-3144218
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
3576 Unocal Place, Santa Rosa, California 95403
(Address of principal executive offices) (Zip Code)
(707) 525-0111
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On October 15, 1998, AVE reported its sales and earnings for the
quarterly period ended September 30, 1998. Net sales for the quarter increased
514% to $161.3 million from $26.3 million for the corresponding period in
fiscal 1998. Net income for the quarterly period was $53.2 million, or $0.80
per share on a diluted basis, compared with $5.7 million, or $0.09 per share in
the corresponding period in fiscal 1998.
A copy of the press release announcing the earnings for the first
quarter of fiscal 1999 is attached as Exhibit 99.1 and is incorporated herein
by reference.
ITEM 7. EXHIBITS.
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<S><C>
Exhibit No. Description
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99.1 Press Release, dated October 15, 1998, entitled "AVE Reports First Quarter Fiscal 1999 Earnings."
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2.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ARTERIAL VASCULAR ENGINEERING, INC.
Dated: November 12, 1998 By: /s/ LAWRENCE J. FASSLER
-------------------------------
Lawrence J. Fassler
Vice President of Legal Affairs
General Counsel, Secretary
3.
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INDEX TO EXHIBITS
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<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
99.1 Press Release, dated October 15, 1998, entitled "AVE Reports
First Quarter Fiscal 1999 Earnings."
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4.
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AVE REPORTS FIRST QUARTER FISCAL 1999 EARNINGS
SANTA ROSA, CA - October 15, 1998 -- Arterial Vascular Engineering, Inc. ("AVE")
(Nasdaq National Market: AVEI) today reported its sales and earnings for the
quarterly period ended September 30, 1998.
Net sales for the quarter increased 514% to $161.3 million from $26.3 million
for the corresponding period in fiscal 1998. Net income for the quarterly period
was $53.2 million, or $0.80 per share on a diluted basis, compared to $5.7
million, or $0.09 per share in the corresponding period in fiscal 1998.
"This quarter, we believe AVE retained its position as the number one coronary
stent company in the world, despite the entry of an additional competitor into
the U.S. market" said Scott Solano, AVE's chairman and chief executive officer.
"Although we anticipated that this increased competition would decrease net
sales, both our sales and earnings came in above plan for the quarter, primarily
due to continued strong acceptance of our GFX(R) coronary stent systems in the
United States and abroad. In addition, our GFX 2 coronary stent system, which
features a lower profile than the GFX product line as well as a high pressure,
minimally compliant delivery system, continues to be rolled out and has allowed
us to maintain our technology leadership in Europe."
"During the quarter, we completed the clinical registries on both our GFX 2.5
coronary stent system for smaller vessels and our GFX XL coronary stent system
for longer lesions," continued Mr. Solano. "We will be filing PMA supplements
for these products during the current quarter. We believe that these products
will help us to further grow the coronary stent market in the United States by
providing additional treatment options to the interventional cardiologist. We
have also now filed PMA supplements for our GFX XP and GFX 2 generation coronary
stent systems."
"We also published the results of our REFLEX trial, a prospective, multi-center
GFX trial with angiographic restenosis as the primary endpoint. The results, as
measured by quantitative coronary angiography, showed an 18.8% restenosis rate
after 6-month follow-up. We believe this is a highly competitive long-term
clinical result that supports the use of the GFX in a wide variety of clinical
applications."
"As previously announced, subsequent to the close of the quarter AVE consummated
its acquisition of the coronary catheter lab business of C. R. Bard, Inc. We are
actively working on the integration of that business and have reorganized our
sales forces and senior management to begin taking advantage of the synergies we
believe are realizable through that transaction."
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Headquartered in Santa Rosa, California, Arterial Vascular Engineering, Inc. is
a leading provider of highly specialized stent and balloon angioplasty systems
and related products for less invasive interventional treatment of
cardiovascular disease.
Except for the historical information contained herein, this news release
contains forward-looking statements that involve risks and uncertainties,
including the ability of the company to successfully integrate the operations of
acquired businesses and the risks of business acquisitions generally, variations
in the level of sale and earnings, the ability to manage growth effectively, the
ability to successfully introduce and achieve market acceptance for new products
and continued demand for products generally, the effects of competition and
pricing pressure, the rapid and significant technological change that
characterizes the medical device industry and the ability to continue to respond
to such technological change, as well as the other risks detailed from time to
time in documents filed by AVE with the SEC, including the report on Form 10-K
for the year ended June 30, 1998.
ARTERIAL VASCULAR ENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
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<CAPTION>
September 30, June 30,
1998 1998
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<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $135,555 $ 48,282
Short-term investments 96,729 126,843
Accounts receivable, net 90,456 109,851
Inventories 11,544 9,524
Deferred income tax 14,687 14,687
Prepaid expenses and current assets 9,042 5,814
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Total current assets 358,013 315,001
Deferred income tax 896 896
Property, plant and equipment, net 78,573 71,095
Other assets 445 477
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Total assets $437,927 $387,469
======== ========
LIABILITIES
Current liabilities
Accounts payable $ 11,718 $ 13,894
Accrued employee bonus 18,133 25,585
Accrued expenses 36,281 27,530
Income taxes payable 32,813 43,482
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Total current liabilities 98,945 110,491
STOCKHOLDERS' EQUITY
Common stock 64 65
Additional paid-in capital 125,100 117,281
Deferred compensation (224) (268)
Treasury stock (390) (390)
Cumulative translation adjustment (767) (1,731)
Retained earnings 215,199 162,022
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Total stockholders' equity 338,982 276,978
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Total liabilities and stockholders' equity $437,927 $387,469
======== ========
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ARTERIAL VASCULAR ENGINEERING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
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<CAPTION>
Three Months Ended
September 30,
1998 1997
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<S> <C> <C>
Net sales $161,268 $26,263
Cost of sales 24,574 5,489
Gross profit 136,694 20,774
Operating expenses:
Research and development 14,938 5,478
Selling, general and administrative 36,387 7,517
Total operating expenses 51,325 12,995
Operating income 85,369 7,779
Interest and other income 3,260 1,006
Income before provision for income taxes 85,629 8,785
Provision for income taxes 35,452 3,075
Net income $ 53,177 $ 5,710
Net income per share - basic $ 0.84 $ 0.10
Net income per share - diluted $ 0.80 $ 0.09
Shares used to calculate net income per share:
Basic 63,189 59,626
Diluted 66,181 64,474
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SOURCE Arterial Vascular Engineering, Inc.
/CONTACT: John D. Miller, Chief Financial Officer of Arterial Vascular
Engineering, Inc., 707-525-0111/
(AVEI)
