Kips Bay Medical, Inc. (NASDAQ:KIPS) today announced financial results for the three months ended April 2, 2011.
In the first quarter of 2011, net sales and gross profit were $110,000 and $73,000, respectively. Net loss in the first quarter of 2011 was $909,000, or $0.06 per diluted share, compared to our net loss of $3.5 million, or $0.27 per diluted share, in the first quarter of 2010. During the first quarter of 2011, we initiated sales with two new independent distributors, and we achieved a gross margin of 66.4% compared to 69.0% in the fourth quarter of 2010. The gross margin variance resulted from a change in the distributor sales mix during the quarter and the impact of reduced manufacturing volumes on our cost of sales. Also note that our net loss for the first quarter of 2010 included a $2.3 million non-cash charge for an increase in the estimated fair value of an investor stock purchase option liability. This option was exercised in February 2010 at which time the related liability was reclassified to equity.
Balance Sheet and Cash Flow
Cash and short-term investments increased to $17.2 million at April 2, 2011 from $3.8 million as of December 31, 2010. Total current assets increased to $18.2 million from $5.7 million over the same period. These increases were driven by our Initial Public Offering ("IPO") completed in February 2011, from which we realized net proceeds of approximately $13.6 million.
Our current liabilities decreased from $5.7 million as of December 31, 2010 to $5.3 million as of April 2, 2011. This decrease resulted from our payment of certain expenses related to our IPO that were both in accounts payable and accrued liabilities as of December 31, 2010, and paid upon the completion of our IPO.
Cash used in operations declined from $972,000 for the three months ended April 3, 2010 to $215,000 for the three months ended April 2, 2011. This decrease is attributable to the decrease in the deferred offering costs, recorded as part of prepaid expenses and other current assets, which were reclassified to additional paid-in capital upon the completion or our IPO, partially offset by the payment of certain IPO expenses that were recorded in accounts payable and accrued liabilities as of December 31, 2010.