HemoSense Second Quarter Revenue Increases 98%

  
    
  
  
    
      HemoSense, Inc. (AMEX:HEM) – a point of care 
      diagnostic healthcare company that develops, manufactures and sells 
      easy-to-use, handheld blood coagulation monitoring systems for use by 
      patients and healthcare professionals in the management of warfarin 
      medication – today reported financial results 
      for the three and six months ended March 31, 2007.
    
    
      
        Total revenue for the fiscal 2007 second quarter was $8.0 million, an 
        increase of 98% from total revenue of $4.0 million in the fiscal 2006 
        second quarter. Domestic revenue was $6.6 million and international 
        revenue was $1.4 million, representing increases of 101% and 83%, 
        respectively, compared with the same quarter in the prior year. Total 
        revenue included $6.2 million in revenue for INRatio® 
        test strips, a 129% increase from the fiscal 2006 second quarter, and 
        $1.8 million in revenue for INRatio meters and accessories, a 35% 
        increase over the fiscal 2006 second quarter.
      
      
        HemoSense reported a gross profit of $3.2 million for the quarter, or 
        40% of total revenue, compared with a gross profit of $1.0 million, or 
        25% of total revenue, for the fiscal 2006 second quarter. The 217% 
        improvement from the prior period was due primarily to increased unit 
        production volumes and sales of test strips, as well as to continued 
        process efficiencies.
      
      
        Operating expenses for the quarter were $4.5 million, up 18% from $3.8 
        million for the fiscal 2006 second quarter.
      
      
        The net loss for the fiscal 2007 second quarter decreased to $1.7 
        million, or $0.13 per share, from $3.0 million, or $0.27 per share, 
        for the fiscal 2006 second quarter. Included in the net loss and the 
        net loss per share for the second quarter of fiscal 2007 is a non-cash 
        charge of $108,000, or approximately $0.01 per share, related to 
        stock-based compensation expense pursuant to SFAS No. 123(R), compared 
        with $80,000 or less than $0.01 per share for the fiscal 2006 second 
        quarter.
      
    
    
      “We are very pleased with the continued strong 
      demand for our technology, and our performance indicates we have 
      continued to enjoy increased market penetration for our INRatio 
      products, including making inroads in the portion of the market held by 
      reference labs,” said Jim Merselis, President 
      and CEO of HemoSense. “Importantly, our gross 
      profit margin continued to improve as we achieved operating efficiencies 
      at higher production levels. In order to meet expected levels of demand, 
      we are planning to expand our production and warehousing capacity 
      beginning later this quarter. We are in the process of obtaining a lease 
      on the building adjacent to our current facility, which will 
      approximately double our current floor space.”
    
    
      HemoSense reported cash, cash equivalents and short-term investments of 
      $17.4 million as of March 31, 2007.
    
    
      Year-to-Date Financial Results
    
    
      For the six months ended March 31, 2007, total revenue was $14.7 
      million, an increase of 97% from $7.5 million for the comparable fiscal 
      2006 six month period. Year-to-date domestic revenue was $12.5 million, 
      an increase of 105% over the fiscal 2006 period, and international 
      revenue was $2.2 million, an increase of 59% over the fiscal 2006 
      period. Total revenue included $10.9 million in test strip revenue, an 
      increase of 129% from the comparable fiscal 2006 period, and $3.8 
      million in meters and accessories revenue, up 40% from the comparable 
      fiscal 2006 period.
    
    
      Gross profit for the first half of fiscal 2007 was $5.8 million, 
      compared with a gross profit of $2.1 million in the first half of fiscal 
      2006. Operating expenses in the first half of fiscal 2007 were $8.3 
      million, an increase from $7.1 million in the comparable 2006 period. 
      The net loss in the first half of fiscal 2007 was $3.1 million, compared 
      with a net loss of $5.3 million for the first half of fiscal 2006.
    
    
      Fiscal Year 2007 Financial Guidance
    
    
      HemoSense today updated its financial guidance for its fiscal year 
      ending September 30, 2007. The guidance takes into consideration the 
      following factors:
    
    
      
        Increased demand for the INRatio system
      
      
        Capital expenditures related to the planned facilities expansion
      
      
        Increases in operating costs associated with the facilities expansion 
        and higher production levels
      
      
        Expected subsequent operating efficiencies related to increased volume 
        and expanded production and warehousing capability
      
    
    
      The Company now anticipates fiscal 2007 total revenue to be in the range 
      of $30 million to $32 million, representing growth of 84% to 96% over 
      fiscal 2006. HemoSense also expects the fiscal 2007 net loss to be in 
      the range of $5 million to $6 million, which includes approximately 
      $570,000 in stock-based compensation expense. The net loss per common 
      share is expected to be $0.39 to $0.47 based on approximately 12.7 
      million average common shares outstanding.
    
    
      Conference Call Information
    
    
      Management will host an investment community conference call beginning 
      today at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss this 
      announcement and to answer questions. Individuals interested in 
      listening to the conference call may do so by dialing [phone] for 
      domestic callers, or [phone] for international callers. A 
      telephone replay will be available for 48 hours following the conclusion 
      of the call by dialing [phone] for domestic callers, or (706) 
      645-9291 for international callers, and entering reservation code 
      5406225.
    
    
      The live conference call will also be available via the Internet on the 
      Investor Relations section of the Company’s 
      Web site at www.hemosense.com. A 
      recording of the call will be available on the Company’s 
      Web site for 30 days following the completion of the call.
    
    
      About HemoSense
    
    
      HemoSense is a point-of-care diagnostic healthcare company that 
      develops, manufactures and markets easy-to-use, handheld blood 
      coagulation systems for monitoring patients taking warfarin. The 
      HemoSense INRatio® system, used by healthcare 
      professionals and patients themselves, consists of a small monitor and 
      disposable test strips. It provides accurate and convenient measurement 
      of blood clotting time, or PT/INR values. Routine measurements of PT/INR 
      are necessary for the safe and effective management of the patient’s 
      warfarin dosing. INRatio is sold in the United States and 
      internationally. For more information, visit www.hemosense.com.
    
    
      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 the Company's business that 
      are not historical facts may be "forward-looking statements" that 
      involve risks and uncertainties. Specifically, statements including 
      those relating to financial guidance for fiscal year 2007, the extent, 
      timing and cost of expansion of production and warehousing capacity, as 
      well as improved efficiencies and operating performance resulting 
      therefrom, the expectation of increased demand for the INRatio system, 
      and capital expenditures, are forward looking statements within the 
      meaning of the Safe Harbor. Forward-looking statements are based on 
      management's current, preliminary, expectations and are subject to risks 
      and uncertainties which may cause the actual results to differ 
      materially from the statements contained herein. The Company’s 
      fiscal 2007 second quarter financial results are preliminary and 
      unaudited, and are subject to adjustment. Further information on the 
      Company's business, prior financial results and risk factors are 
      detailed in its filings with the SEC, including its Form 10-K for the 
      year ended September 30, 2006 filed on December 27, 2006, and Form 10-Q 
      for the quarter ended December 31, 2006 filed on February 13, 2007. 
      Undue reliance should not be placed on these forward-looking statements, 
      which speak only as of the date they are made. The Company 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.
    
    
      HemoSense® and INRatio® 
      are registered trademarks of HemoSense, Inc.
    
    
      
        
          
            HemoSense, Inc.
          
          
            Statements of Operations
          
          
            (Unaudited)
          
          
            (In thousands, except per share data)
          
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Three Months Ended
        
        
        
        
          Six Months Ended
        
      
      
        
        
        
          March 31,
        
        
        
        
          March 31,
        
      
      
        
        
        
          2007 
        
        
        
        
          2006 
        
        
        
        
          2007 
        
        
        
        
          2006 
        
      
      
        
          Revenue
        
        
          $ 7,993 
        
        
        
        
          $ 4,042 
        
        
        
        
          $ 14,731 
        
        
        
        
          $ 7,478 
        
      
      
        
          Cost of goods sold
        
        
          4,801 
        
        
        
        
          3,036 
        
        
        
        
          8,939 
        
        
        
        
          5,367 
        
      
      
        
          Gross profit
        
        
          3,192 
        
        
        
        
          1,006 
        
        
        
        
          5,792 
        
        
        
        
          2,111 
        
      
      
        
          Operating expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Research and development
        
        
          601 
        
        
        
        
          667 
        
        
        
        
          1,187 
        
        
        
        
          1,144 
        
      
      
        
          Sales and marketing
        
        
          2,872 
        
        
        
        
          2,064 
        
        
        
        
          4,980 
        
        
        
        
          3,896 
        
      
      
        
          General and administrative
        
        
          1,041 
        
        
        
        
          1,103 
        
        
        
        
          2,155 
        
        
        
        
          2,042 
        
      
      
        
          Total operating expenses
        
        
          4,514 
        
        
        
        
          3,834 
        
        
        
        
          8,322 
        
        
        
        
          7,082 
        
      
      
        
          Loss from operations
        
        
          (1,322)
        
        
        
        
          (2,828)
        
        
        
        
          (2,530)
        
        
        
        
          (4,971)
        
      
      
        
          Interest income
        
        
          213 
        
        
        
        
          161 
        
        
        
        
          352 
        
        
        
        
          306 
        
      
      
        
          Interest and other expense, net
        
        
          (586)
        
        
        
        
          (318)
        
        
        
        
          (945)
        
        
        
        
          (646)
        
      
      
        
          Net loss
        
        
          $ (1,695)
        
        
        
        
          $ (2,985)
        
        
        
        
          $ (3,123)
        
        
        
        
          $ (5,311)
        
      
      
        
          Net loss per share:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic and diluted
        
        
          $(0.13)
        
        
        
        
          $(0.27)
        
        
        
        
          $(0.25)
        
        
        
        
          $(0.49)
        
      
      
        
          
            Shares used to compute loss per share:
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          
             
          
        
      
      
        
          
            Basic and diluted
          
        
        
          
            13,066 
          
        
        
        
        
          
            11,165 
          
        
        
        
        
          
            12,336 
          
        
        
        
        
          
            10,849 
          
        
      
    
    
      
        
          
             
          
          
            HemoSense, Inc.
          
          
            Balance Sheets
          
          
            (In thousands)
          
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
             
          
        
        
          
            March 31,2007
          
        
        
        
        
        
        
          September 30, 2006
        
      
      
        
        
        
          (unaudited)
        
      
      
        
          Assets
        
        
        
        
        
        
        
        
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
          $ 4,328 
        
        
        
        
        
        
          $ 1,789 
        
      
      
        
          Short term investments
        
        
          13,022 
        
        
        
        
        
        
          7,939 
        
      
      
        
          Accounts receivable, net
        
        
          3,101 
        
        
        
        
        
        
          3,148 
        
      
      
        
          Prepaid expenses and other current assets
        
        
          1,040 
        
        
        
        
        
        
          371 
        
      
      
        
          Inventories, net
        
        
          3,970 
        
        
        
        
        
        
          2,731 
        
      
      
        
          Total current assets
        
        
          25,461 
        
        
        
        
        
        
          15,978 
        
      
      
        
          Property and equipment, net
        
        
          995 
        
        
        
        
        
        
          501 
        
      
      
        
          Technology licenses, net
        
        
          381 
        
        
        
        
        
        
          245 
        
      
      
        
          Other assets
        
        
          123 
        
        
        
        
        
        
          126 
        
      
      
        
          Total assets
        
        
          $ 26,960 
        
        
        
        
        
        
          $ 16,850 
        
      
      
        
          Liabilities and Shareholders' Equity
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
          $1,562 
        
        
        
        
        
        
          $ 1,142 
        
      
      
        
          Accrued expenses and other liabilities
        
        
          2,456 
        
        
        
        
        
        
          1,751 
        
      
      
        
          Capital lease, current portion
        
        
          34 
        
        
        
        
        
        
          37 
        
      
      
        
          Borrowings, current portion
        
        
          3,433 
        
        
        
        
        
        
          2,353 
        
      
      
        
          Total current liabilities
        
        
          7,485 
        
        
        
        
        
        
          5,283 
        
      
      
        
          Capital lease, net of current portion
        
        
          -- 
        
        
        
        
        
        
          16 
        
      
      
        
          Borrowings, net of current portion
        
        
          5,381 
        
        
        
        
        
        
          2,476 
        
      
      
        
          Other long term liabilities
        
        
          373 
        
        
        
        
        
        
          398 
        
      
      
        
          Total liabilities
        
        
          13,239 
        
        
        
        
        
        
          8,173 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Shareholders' equity:
        
        
        
        
        
        
        
        
        
      
      
        
          Common stock
        
        
          13 
        
        
        
        
        
        
          11 
        
      
      
        
          Additional paid-in capital
        
        
          74,908 
        
        
        
        
        
        
          66,739 
        
      
      
        
          Unrealized loss on investments
        
        
          (6)
        
        
        
        
        
        
          (2)
        
      
      
        
          Accumulated deficit
        
        
          (61,194)
        
        
        
        
        
        
          (58,071)
        
      
      
        
          Total shareholders’ equity
        
        
          13,721 
        
        
        
        
        
        
          8,677 
        
      
      
        
          Total liabilities and shareholders’ equity
        
        
          $ 26,960 
        
        
        
        
        
        
          $ 16,850