Kips Bay Medical, Inc. (NASDAQ: KIPS) today announced financial results for the second quarter and six months ended July 2, 2011.
Net sales were $48,000 in the second quarter of 2011 and 2010 while gross profit was down 6.9% or $2,000 in the second quarter of 2011 as compared to the second quarter of 2010. Net loss in the second quarter of 2011 was $1.0 million, or $0.07 per diluted share, compared to a net loss of $5.9 million, or $0.43 per diluted share, in the second quarter of 2010. During the second quarter of 2011, the Company initiated sales with one new independent distributor, and realized a gross margin of 56.3% compared to 60.4% in the second quarter of 2010. The decline in gross margin during the current quarter resulted from changes in the distributor sales mix and the effects of reduced manufacturing volumes on the cost of sales. Net loss for the second quarter of 2010 included a $5.0 million non-cash charge for the first milestone payment payable to Medtronic, Inc. triggered by the first commercial sale of the eSVS MESH. This milestone was paid in June 2011 on the one-year anniversary of the first commercial sale.
Net sales increased to $158,000 for the six months ended July 2, 2011, up from $48,000 for the same period in the prior year. The net loss in the first half of 2011 was $2.0 million, or $0.13 per diluted share, compared to a net loss of $9.4 million, or $0.70 per diluted share, in the first half of 2010. The Company achieved a gross margin of 63.3% compared to 60.4% for the first half of 2011 and 2010, respectively. The net loss for the first half of 2010 included both the charge for the $5.0 million milestone obligation payable to Medtronic and a $2.3 million non-cash charge for an increase in the estimated fair value of an investor stock purchase option liability.
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