Kips Bay Medical, Inc. (NASDAQ: KIPS) today announced financial results for the nine months and third quarter ended October 1, 2011.
Net sales increased to $158,000 for the nine months ended October 1, 2011, up from $107,000 for the same period in the prior year. The net loss in the first nine months of 2011 was $3.1 million, or $0.20 per diluted share, compared to a net loss of $10.1 million, or $0.75 per diluted share, in the first nine months of 2010. The Company achieved a gross margin of 63.3% compared to 62.6% during the first nine months of 2011 and 2010, respectively. The net loss for the first nine months 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 and a $2.3 million non-cash charge for an increase in the estimated fair value of an investor stock purchase option liability.
In the third quarter of 2011 net sales were nil down from $59,000 in the third quarter of 2010. Gross profit was $37,000 in the third quarter of 2010. Net loss in the third quarter of 2011 was $1.2 million, or $0.08 per diluted share, compared to a net loss of $733,000, or $0.05 per diluted share, in the third quarter of 2010. The decrease in net sales during the current quarter is due to limited availability of reimbursements to hospitals and the effects of the summer holiday season in Europe causing reduced usage of the Company’s eSVS
MESH. The Company expects sales to increase slightly and continue at modest levels until additional clinical study data is available.
Balance Sheet and Cash Flow
Cash, cash equivalents and short-term investments increased to $10.0 million at October 1, 2011 from $3.8 million as of December 31, 2010. Total current assets increased to $11.1 million from $5.7 million over the same period. These increases were driven by the Company’s Initial Public Offering (“IPO”) completed in February 2011, from which the Company realized net proceeds of approximately $13.6 million, partially offset by cash used in operations during the first nine months of 2011.