ArthroCare Corp. (NASDAQ: ARTC), a leader in developing state-of-the-art, minimally invasive surgical products, announced its financial results for the third quarter ended September 30, 2011.

REVENUE

Total revenue from continuing operations for the third quarter of 2011 was $83.3 million, compared to $86.5 million for the third quarter of 2010, a decrease of 3.7 percent.

Proprietary product sales were $74.7 million in the third quarter of 2011 compared to $72.6 million for the third quarter of 2010, an increase of $2.1 million or 2.9 percent. Worldwide sales of the Company’s proprietary Sports Medicine products increased $0.8 million or 1.6 percent, as a decline in the Americas products sales was offset by higher International reported product sales. ENT product sales increased $1.9 million, or 8.2 percent, from increased product volume across all geographies as well as higher average sales prices in the Americas. Other product sales declined $0.5 million in the third quarter of 2011 compared to the same period of 2010.

Contract manufactured product sales were $4.7 million in the third quarter of 2011 compared to $10.3 million for the third quarter of 2010, a decrease of $5.6 million.

Had the same foreign currency rates been in effect in the quarter ended September 30, 2011 as were in effect in the same quarter in 2010, the U.S. dollar reported value of product sales would have been lower by $2.1 million for the quarter ended September 30, 2011.

GROSS PRODUCT MARGIN

Gross product margin was 67.9 percent for the third quarter of 2011 compared to 65.5 percent for the third quarter of 2010. The increase in gross product margin in the third quarter of 2011 was due to lower inventory obsolescence charges, lower controller amortization charges and lower contract manufactured product sales which generally realize lower product margins in the third quarter of 2011 compared to the same period in 2010.

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