North American Scientific (MM) (NASDAQ:NASI)
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North American Scientific, Inc. (Nasdaq:NASI) today announced financial
results for its fiscal fourth quarter and fiscal year ended October 31,
2007. For the fourth quarter of fiscal 2007, the Company reported
revenues from continuing operations of approximately $4.2 million, a 25%
increase over the fourth quarter of the prior year, and a net loss of
$3.9 million, or $0.13 per share, including $0.8 million related to the
discontinued operations of the NOMOS®
Radiation Oncology business. The fourth quarter loss represented a 36%
decrease as compared to the net loss for the fourth quarter of the prior
fiscal year, primarily due to a reduced loss relating to the
discontinued NOMOS operations.
“During the fiscal fourth quarter we achieved
our ninth consecutive quarter of year-over-year growth in our Radiation
Sources business,” said John B. Rush,
President and Chief Executive Officer of North American Scientific. “Our
Radiation Sources business grew 22% during fiscal 2007. This growth was
generated by our renewed focus on our brachytherapy business which has
resulted in new customer contracts and the addition of value-added
products and services. We believe we are well positioned to capitalize
on the positive, emerging market dynamics and our strong relationships
with our customers, which together should support growth in fiscal 2008
and beyond.
“Regarding our new breast brachytherapy
product, ClearPath, we continue to execute our strategic plan that
includes working closely with key medical opinion leaders as we prepare
for full commercialization,” continued Mr.
Rush. “The first step in this process has
begun with our initial clinical experiences in a few targeted medical
centers. During fiscal 2008, we intend to continue to spearhead a number
of development and marketing activities that will support our commercial
launch and generate additional mindshare among healthcare professionals.
Our full commercialization plan also includes the introduction and
launch of a second generation device for our ClearPath-HDR, featuring
increased functionality and ease-of-use for radiation oncologists. We
also are finalizing the design for our low-dose rate treatment device,
ClearPath-CR™ and we would expect to have a
product ready for commercialization in fiscal 2008.
“As previously announced we have completed a
$15.5 million equity financing to fund operations and our ClearPath
product line for breast brachytherapy,”
continued Mr. Rush. “We are excited about the
progress we have made, and look forward to continued execution as a more
focused entity.”
Fourth Quarter Financial Results
For the fourth quarter of fiscal 2007, the Company reported revenues
from continuing operations of approximately $4.2 million compared with
revenues from continuing operations of $3.3 million for the fourth
quarter of fiscal 2006. The 25% increase from the prior year was due to
a 30% increase in sales of the Company’s
brachytherapy seeds and accessories, and a 9% increase in
non-therapeutic product sales.
The net loss from continuing operations for the fourth quarter of fiscal
2007 was $3.2 million, or $0.11 per share, compared with the net loss
from continuing operations for the fourth quarter of fiscal 2006 of $2.8
million, or $0.10 per share. The $0.3 million increase in the net loss
from continuing operations was primarily due to $0.5 million increased
interest expense on debt, partially offset by $0.2 million higher gross
profit on increased revenues.
The net loss for the fourth quarter of fiscal 2007 was $3.9 million, or
$0.13 per share, compared with the net loss for the fourth quarter of
fiscal 2006 of $6.1 million, or $0.21 per share. The $2.2 million
decrease in the net loss was primarily due to a $2.5 million reduction
in the net loss from the discontinued NOMOS®
Radiation Oncology business, partially offset by the $0.3 million
increase in the net loss from continuing operations related to interest
expense.
At the end of the fourth quarter of fiscal 2007, the Company had $0.6
million in cash and cash equivalents, compared with $9.3 million at the
end of fiscal year 2006. During the fourth quarter of fiscal 2007, the
Company used $3.0 million cash in operating activities for continuing
operations, compared with $2.9 million in the fourth quarter of the
prior year. As of October 31, 2007 the Company had borrowed $2.2 million
on its bank credit line and $1.0 million on a bridge loan. Our existing
credit line expires and all amounts outstanding thereunder become due on
February 1, 2008. We are currently discussing a new credit line with our
bank, but no assurances can be given that this credit line will be
obtained.
On January 22, 2008 the Company announced the closing on January 18,
2008 of a private placement of shares of its common stock and warrants
for the purchase of common stock. The Company has received gross
proceeds of $15.5 million from the financing which will be used for
continued development of ClearPath™, the
Company’s breast brachytherapy device, as
well as working capital.
The private placement increased the Company’s
stockholders’ equity from a $2.9 million
deficit, as reported for the fiscal year ended October 31, 2007, to
proforma stockholders’ equity of $11.2
million assuming estimated closing costs of $1.4 million, and excluding
financial results subsequent to October 31, 2007. The proforma
stockholders’ equity exceeds the $2.5 million
minimum stockholders’ equity requirement for
continued listing on the Nasdaq Capital Market.
Jim Klingler, Chief Financial Officer, added, “We
are pleased that we were able to complete our $15.5 million private
placement of common stock in January, 2008 to support our continuing
operations and ClearPath. Although our goal is to use our existing
financial resources, including cash and expected available credit lines,
to reach profitability, obtaining adequate financing is an important
part of our business strategy. We believe that our focus on serving the
large and growing addressable market opportunities that are emerging in
radiation therapy will provide the Company with exciting growth
opportunities.”
Fiscal Year Financial Results
For fiscal 2007, the Company reported revenues from continuing
operations of approximately $15.3 million compared with revenues from
continuing operations of $12.6 million for fiscal 2006. The 22% increase
from the prior year was due to a 24% increase in sales of our
brachytherapy seeds and accessories, and a 16% increase in sales of our
non-therapeutic products.
The net loss from continuing operations for fiscal 2007 was $10.5
million, or $0.36 per share, compared with the net loss from continuing
operations for fiscal 2006 of $9.4 million, or $0.43 per share. The $1.1
million increase in the net loss from continuing operations was
primarily due to $1.0 million in increased selling and marketing expense
and $0.6 million increased research and development expense, both
primarily related to the ClearPath device, and $0.4 million increased
interest expense on debt, which was partially offset by increased gross
profit of $1.0 million resulting from increased sales.
The net loss for fiscal 2007 was $21.0 million, or $0.72 per share,
compared with the net loss for fiscal 2006 of $17.1 million, or $0.78
per share. The $3.9 million increase in the net loss was primarily due
to a $2.8 million increase in the net loss from discontinued operations,
and a $1.1 million increase in the net loss from continuing operations
described above.
ClearPath™ Breast Brachytherapy Update
The ClearPath systems are intended to combine the ease-of-use benefits
of balloon brachytherapy products with the customized dose planning
benefits of the multi-catheter brachytherapy procedure into one device.
This innovative combination is expected to allow more patients to access
the shorter radiation treatment cycles offered through accelerated
partial breast irradiation (APBI) when treated with the ClearPath Device.
The ClearPath systems are placed in the patient through a single
incision and are designed to adapt to the resection cavity, allowing for
more conformal therapeutic radiation dose distribution following
lumpectomy compared to other methods of APBI. ClearPath is designed to
accommodate either high-dose, ClearPath-HDR™,
or low-dose rate, ClearPath-CR™, treatment
methods. The Company has received 510k approval from the United States
FDA for both ClearPath-HDR and ClearPath-CR.
Throughout the fourth quarter of fiscal 2007, the Company began clinical
experience and collected data from human patient implants performed by
key opinion leaders with the first generation ClearPath-HDR device. The
Company plans several key developments and marketing activities designed
to support the successful commercialization of the ClearPath™
products in fiscal 2008:
Key ClearPath Development Activities planned in Fiscal 2008
Complete development and introduce second generation ClearPath-HDR
products that increase functionality and ease-of-use
Introduce the first generation ClearPath-CR (continuous release)
products
Strategically expand the Company’s
distribution and sales organization to focus on ClearPath™
products
Conference Call Today
The Company will host an investor conference call to review its fourth
quarter and fiscal year 2007 financial results and latest corporate
developments, beginning at 1:30 p.m. Pacific Time/4:30 p.m.
Eastern Time on Tuesday, January 29, 2008. The dial-in number
for the conference call is 800-240-2430 for domestic participants and
303-262-2006 for international participants.
A live webcast of North American Scientific's conference call will be
available over the Internet through its website at www.nasmedical.com
in the Investor Center. For those who cannot listen to the live webcast,
a taped replay of the call will be available beginning approximately one
hour after the call’s conclusion and will
remain available for seven days. It can be accessed at the same site
shortly after the call, or by dialing 800-405-2236 for domestic callers
and 303-590-3000 for international callers, using the passcode 11107832#.
About North American Scientific
North American Scientific is a leader in radiation therapy in the fight
against cancer. Its innovative products provide physicians with tools
for the treatment of various types of cancers. They include Prospera®
brachytherapy seeds and SurTRAK™ needles and
strands used primarily in the treatment of prostate cancer. In addition,
the Company has been gaining clinical experience with its first
generation ClearPath™ multi-channel catheter
breast brachytherapy devices in 2007, and intends to launch the second
generation devices in 2008. They are the only such devices approved for
both high dose and continuous release, or low dose, radiation
treatments. The devices are designed to provide flexible, precise dose
conformance and an innovative delivery system that is intended to offer
the more advanced form of brachytherapy for the treatment of breast
cancer. Please visit www.nasmedical.com
for more information.
Statements included in this release that are not historical facts may
be considered forward-looking statements that are subject to a variety
of risks and uncertainties. There are a number of important factors that
could cause actual results to differ materially from those expressed in
any forward-looking statements made by the Company including, but not
limited to, the impact of competitive products and pricing,
technological changes, changes in relationships with strategic partners
and dependence upon strategic partners for the performance of critical
activities under collaborative agreements, the ability of the Company to
successfully directly market and sell its products, uncertainties
relating to patent protection and regulatory approval, the stable supply
of appropriate isotopes, research and development estimates, market
opportunities, risks associated with strategic opportunities or
acquisitions the Company may pursue and the risk factors included in the
Company’s filings with the Securities and
Exchange Commission. Any forward-looking statements contained in this
news release speak only as of the date of this release, and the Company
undertakes no obligation to revise or update any forward-looking
statements, whether as a result of new information, future results or
otherwise.
NORTH AMERICAN SCIENTIFIC, INC.
Consolidated Statements of Operations
Three months endedOctober 31,
(Unaudited)
For the years endedOctober 31,
2007
2006
2007
2006
Revenue
Product
$
4,177,000
$
3,349,000
$
15,317,000
$
12,594,000
Cost of revenue
Product
2,898,000
2,298,000
10,690,000
8,998,000
Gross profit
1,279,000
1,051,000
4,627,000
3,596,000
Operating expenses
Selling expenses
974,000
800,000
3,819,000
2,772,000
General and administrative expenses
2,515,000
2,682,000
9,010,000
8,964,000
Research and development
498,000
445,000
1,780,000
1,160,000
Amortization of intangible assets
7,000
7,000
28,000
28,000
Total operating expenses
3,994,000
3,934,000
14,637,000
12,923,000
Loss from operations
(2,715,000
)
(2,882,000
)
(10,010,000
)
(9,326,000
)
Interest and other income (expense)
(437,000
)
52,000
(535,000
)
(119,000
)
Loss before provision for income taxes
(3,152,000
)
(2,830,000
)
(10,545,000
)
(9,445,000
)
Provision for income taxes
—
—
—
—
Loss from continuing operations
(3,152,000
)
(2,830,000
)
(10,545,000
)
(9,445,000
)
Loss from discontinued operations (including a loss on disposal of
$7,107,000 in 2007)
(783,000
)
(3,297,000
)
(10,453,000
)
(7,685,000
)
Net loss
$
(3,935,000
)
$
(6,127,000
)
$
(20,998,000
)
$
(17,130,000
)
Basic and diluted loss per share:
Continuing operations
$
(0.11
)
$
(0.10
)
$
(0.36
)
$
(0.43
)
Discontinued operations
(0.02
)
(0.11
)
(0.36
)
(0.35
)
Net loss
$
(0.13
)
$
(0.21
)
$
(0.72
)
$
(0.78
)
Weighted average number of shares outstanding, basic and diluted
29,395,331
29,338,220
29,344,269
21,956,565
NORTH AMERICAN SCIENTIFIC, INC.
Consolidated Balance Sheets
October 31,
2007
2006
Assets
Current assets
Cash and cash equivalents
$
609,000
$
903,000
Marketable securities, held to maturity
---
8,420,000
Accounts receivable, net of reserves
2,296,000
2,618,000
Inventories, net of reserves
1,546,000
1,284,000
Prepaid expenses and other current assets
724,000
830,000
Assets held for sale
---
11,377,000
Total current assets
5,175,000
25,432,000
Equipment and leasehold improvements, net
891,000
1,318,000
Intangible assets, net
110,000
138,000
Other assets
---
310,000
Total assets
$
6,176,000
$
27,198,000
Liabilities and Stockholders' (Deficit) Equity
Current liabilities
Lines of credit, net of discount
$
3,241,000
$
---
Warrant derivative
173,000
---
Accounts payable
2,564,000
2,406,000
Accrued expenses
3,110,000
3,790,000
Liabilities related to assets held for sale
---
3,814,000
Total liabilities
9,088,000
10,010,000
Commitments and contingencies
Stockholders' (deficit) equity
Preferred stock, $.01 par value, 2,000,000 shares authorized; no
shares issued
—
—
Common stock, $.01 par value, 100,000,000 (2007) and 40,000,000
(2006) shares authorized; 29,601,352 (2007) and 29,447,270 (2006)
shares issued; and 29,395,331 (2007) and 29,336,144 (2006) shares
outstanding
300,000
298,000
Additional paid-in capital
145,533,000
144,543,000
Treasury stock, at cost – 206,021 (2007)
and 111,126 (2006) common shares
(227,000
)
(133,000
)
Accumulated deficit
(148,518,000
)
(127,520,000
)
Total stockholders' (deficit) equity
(2,912,000
)
17,188,000
Total liabilities and stockholders' (deficit) equity
$
6,176,000
$
27,198,000