SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): February 1, 1999
THE SPECTRANETICS CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 000-19711 84-0997049
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
96 Talamine Court, Colorado Springs, CO 80907
(Address of Principal Executive Offices) (Zip Code)
(719) 633-8333
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On February 1, 1999, The Spectranetics Corporation ("Spectranetics")
announced its earnings for fiscal 1998. A copy of Spectranetics' press release
dated February 1, 1999 is attached hereto as Exhibit 99.1 and the information
contained therein is incorporated by reference herein in its entirety.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibit is filed as part of this Report:
99.1 Press Release of Spectranetics dated February 1, 1999.
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SIGNATURES
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 hereunto duly authorized.
THE SPECTRANETICS CORPORATION
(Registrant)
By: /s/ James P. McCluskey
-----------------------------
James P. McCluskey
Vice President, Finance and
Chief Financial Officer
Dated: February 2, 1998
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EXHIBIT INDEX
Exhibit
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99.1 Press Release of Spectranetics dated February 1, 1999.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
[LOGO]
Spectranetics 96 Talamine Court
- ------------------------------------ Colorado Springs, CO 80907-5186
BRILLIANCE IN INTERVENTIONAL THERAPY www.spectranetics.com
Contact:
James P. McCluskey, VP-Finance February 1, 1999
Jan Morton, Investor Relations
(800) 633-0960
SPECTRANETICS CONTINUES RUN OF RECORD REVENUES
LED BY 59% GROWTH IN U.S. CATHETER SALES IN FOURTH QUARTER
Colorado Springs, Colo. - Feb. 1, 1999 -- The Spectranetics Corporation
(NASDAQ: SPNC) today reported record annual revenues of $27.8-million and a
sixth consecutive quarter of record revenues in the 1998 fourth quarter.
Consolidated revenues in the fourth quarter of 1998 rose 16% over the same
period in 1997 to $7,499,000. Net loss for the quarter decreased 41% to $662,000
or $0.03 a share from $1,123,000 or $0.06 a share in the 1997 period.
For 1998, consolidated revenues increased 27% to $27,784,000. Gross margins
rose to 54% from 49% in 1997, an increase of 500 basis points. The combination
resulted in a 29% decrease in net loss to $3,275,000 or $0.17 a share from
$4,620,000 or $0.25 a share in 1997.
"The growth of the Spectranetics medical business to record levels
throughout 1998 reflects our growing sales of laser catheters for cardiac
procedures," said Joseph A. Largey, President and Chief Executive Officer.
"These proprietary products in turn have driven gross margins to new highs and
moved the Company closer to its goal of profitability."
Continued investment in new product development and clinical trials is
necessary for the ongoing improvement in the Company's financial results.
Fourth Quarter Results
Consolidated revenues from laser catheters, the Company's highest margin
product category and a source of recurring revenue, increased 39% for the
quarter as compared to the same period in 1997. The growth from laser catheters
was led by a 59% increase in the United States, partially offset by a 32%
decline in Europe. The growth in consolidated laser catheter
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revenues was led by lead removal catheters which almost doubled in the fourth
quarter as compared to the same period in 1997.
While placements of the Company's laser systems increased 8% during the
fourth quarter of 1998 as compared to the same period in 1997, laser revenues
declined 25%, due to $636,000 of laser revenues from shipments in fourth quarter
1997 to United States Surgical Corporation (USSC), a division of Tyco
International. Since the laser portion of the supply agreement with USSC was
completed in September 1998, no revenues from these sales were realized in the
fourth quarter of 1998. Excluding the effect of shipments to USSC in both
periods, laser revenues increased 18%.
Service revenues from the Company's base of laser equipment increased 63%
in the fourth quarter.
Polymicro, the Company's drawn silica glass industrial subsidiary, reported
a 21% gain for the quarter as compared to the fourth quarter of 1997. Polymicro
manufactures drawn silica glass products for medical, aerospace and industrial
use, including components for Spectranetics fiber optic catheters.
Consolidated operating expenses increased only 2% in the quarter to
$4,798,000 as compared to the fourth quarter of 1997, reflecting a slowing of
growth in expenses overall. Selling and administration expenses were down 5%
from the 1997 quarter, while research and development costs increased 42% with
the development of new products.
Year-End Results
For the year ended December 31, 1998, consolidated sales of laser catheters
were up 32% as compared to 1997. The growth from laser catheters was led by a
65% increase in the United States, partially offset by a 35% decline in Europe.
With the newest application for lead removal approved by the FDA in late 1997
and two larger sizes of this catheter approved in September 1998, consolidated
sales of the lead removal catheters approximately doubled in 1998. The larger
catheters provide additional capability for removal of larger pacemaker leads as
well as defibrillator leads.
Laser revenues in 1998 were up 19% over 1997 revenues and included
$2.9-million of equipment sales to USSC. In 1997, sales of equipment to USSC
under the laser portion of the supply contract totaled $1.2-million. Laser
equipment service revenues increased 44% in 1998.
Polymicro reported a 28% gain in 1998 sales.
Consolidated operating expenses in 1998 increased 18% to $18,269,000 over
1997 figures. Selling and administration costs were up 17% over 1997, reflecting
investments in the sales organization combined with marketing activities,
primarily related to the lead removal products. Research and development
expenses increased 29% for the year.
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Cash at December 31, 1998 increased by $69,000 from September 30, 1998 to
$4,158,000.
The Spectranetics Corporation develops, manufactures, markets and
distributes technology for interventional cardiovascular therapy. The Company's
CVX-300(R) excimer laser system is the only excimer laser system approved by the
FDA for cardiovascular procedures. The technology has been designed for use in
multiple cardiovascular applications, including coronary angioplasty and the
removal of pacemaker and ICD leads. The Company is also developing additional
applications for its excimer laser technology in restenosed stents, and
peripheral vascular applications.
Polymicro Technologies, Inc., subsidiary located in Phoenix, AZ,
manufactures drawn silica glass products for medical, aerospace and industrial
use, including components for Spectranetics laser catheters.
Note: Spectranetics and CVX-300 are registered trademarks of The Spectranetics
Corporation.
THE SPECTRANETICS CORPORATION
Condensed Consolidated Statements of Operations
(000's, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues ....................................... $ 7,499 $ 6,491 $ 27,784 $ 21,878
Cost of revenues ................................... 3,401 2,956 12,872 11,263
-------- -------- --------
--------
Gross margin ....................................... 4,098 3,535 14,912 10,615
-------- -------- -------- --------
Gross margin % ..................................... 55% 54% 54% 49%
Operating expenses:
Selling & administration ...................... 3,839 4,023 15,370 13,174
Research & development ........................ 959 674 2,899 2,243
-------- -------- -------- --------
Total operating expenses ........................... 4,798 4,697 18,269 15,417
-------- -------- -------- --------
Loss from operations ............................... (700) (1,162) (3,357) (4,802)
Other income ....................................... 38 39 82 182
-------- -------- -------- --------
Net loss ........................................... $ (662) $ (1,123) $ (3,275) $ (4,620)
======== ======== ======== ========
Net loss per share ................................. $ (0.03) $ (0.06) $ (0.17) $ (0.25)
Weighted average shares outstanding
19,110 18,675 19,018 18,654
-------- -------- -------- --------
</TABLE>
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Condensed Consolidated Balance Sheets
(000's, unaudited)
December 31, December 31,
1998 1997
------------ ------------
Assets
Current assets
Cash, cash equivalents and securities ..... $ 4,158 $ 8,590
Accounts receivable ....................... 5,182 4,505
Inventories ............................... 2,610 2,315
Other current assets ...................... 361 295
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Total current assets ............................ 12,311 15,705
Property - net ............................ 5,323 3,906
Other assets .............................. 4,605 5,714
======= =======
Total assets .................................... $22,239 $25,325
======= =======
Liabilities and stockholders' equity
Current liabilities ....................... $ 7,775 $ 8,118
Long term liabilities ..................... 3,196 3,144
Stockholders' equity ...................... 11,268 14,063
======= =======
Total liabilities and stockholders' equity $22,239 $25,325
======= =======
The above information regarding operating expense levels is forward-looking
and actual results may differ materially from the results that Spectranetics
currently anticipates. The specific factors and events that could cause the
actual results to differ materially from the expected results include the
inability to effectively increase revenue levels and decrease expenses to
alleviate excess cash consumption. Actual results may also be affected by, among
other things, risks and uncertainties related to new product development cycles,
research and development activities, regulatory approvals of new products, new
product introductions and market acceptance of new products, introduction of
competitive products by others, third-party reimbursement, physician training,
and other factors including those set forth from time to time in the Company's
Securities and Exchange Commission filings, including the Company's Form 10-K
for the year ended December 31, 1997 and Form 10-Qs filed quarterly in 1998.
Additional information on the company may be obtained from our website
address at www.spectranetics.com.
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