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PLC Systems Reports Third Quarter 2013 Financial Results

MILFORD, MA--(Marketwired - November 14, 2013) - PLC Systems Inc. (PLCSF), a medical device company focused on innovative technologies for the cardiac and vascular markets, today reported financial results for the three and nine months ended September 30, 2013. Highlights of the third quarter and recent weeks include:

  • 80% increase in revenues in the first nine months of 2013 compared with the same period in 2012
  • Continued patient enrollment in the RenalGuard® U.S. pivotal trial
  • Received approval from Japanese Ministry of Health, Labor and Welfare (MHLW) to initiate a clinical trial in Japan using RenalGuard Therapy
  • Expanded use of RenalGuard in a patient following a renal transplant procedure
  • RenalGuard being evaluated in patients undergoing TAVI (Transcatheter Aortic Valve Implantation) procedures in a hospital-initiated 200-patient study
  • Raised $1.7 million in equity financing
  • RenalGuard was successfully used in two live cases that were transmitted via satellite to an audience of several hundred interventional cardiologists at the annual Transcatheter Cardiovascular Therapeutics (TCT) 2013 meeting

"We are pleased with the continued increase in revenue that we recognized this quarter. To date, we have exceeded the amount of revenue that we generated in total during 2012," commented Mark R. Tauscher, President and Chief Executive Officer of PLC Medical Systems. "As we continue to expand the platform nature of our product by using RenalGuard for additional indications beyond our primary market of contrast induced-Acute Kidney Injury (CI-AKI), we anticipated increasing distribution of our consoles outside the U.S."

Mr. Tauscher continued, "The medical community is becoming more aware of the need for RenalGuard to prevent AKI. A recently reported survey of Italian Cardiologist showed that the use of RenalGuard to protect patients at risk of CI-AKI is growing among this group. Furthermore, the medical community is coming to PLC to explore additional uses of RenalGuard as seen in a Brazilian hospital using RenalGuard following a renal transplant procedure and an Israeli hospital using RenalGuard in TAVI patients. We welcome the enthusiasm and support of the hospitals outside the United States and will continue to focus our efforts on expanding visibility of RenalGuard and its market potential."

Financial Results

Revenue for the three and nine months ended September 30, 2013 increased $136,000 and $474,000 or 64% and 80%, respectively, compared with the same period in 2012.The increase in revenue for the three months ended September 30, 2013 was due to a higher volume of RenalGuard single-use sets sold, off-set by a lower volume of consoles sold to international distributors. RenalGuard single use set revenues increased $204,000 or 479% for the three months ended September 30, 2013 as compared to the same period in 2012, due to a higher volume of RenalGuard single-use sets sold to international distributors. 

Cash and cash equivalents totaled $1,404,000 as of September 30, 2013, an increase of $1,146,000 from $258,000 as recorded as of December 31, 2012. The increase in cash and cash equivalents is a result of the financing that the Company conducted in September which resulted in gross proceeds of $1,750,000 from accredited investors. The company expects that it will need to raise additional capital in the next several months based on current and anticipated revenue projections from foreign sales of RenalGuard, and the anticipated costs of the U.S. clinical trial.

Gross profit for the three months ended September 30, 2013 was $224,000, compared with $128,000 for the same period in 2013, an increase of $96,000, or 75%. The increase in gross profit was due to higher sales volume of RenalGuard single-use sets.

Operating expenses, which include SG&A and research and development, for the three months ended September 30, 2013 were $1,494,000, compared with $1,223,000 for the same period in 2012, an increase of $271,000, or 22%. The increase in operating expenses is primarily due to an increase in SG&A expenses of $271,000 or 40%, for the three months ended September 30, 2013 as compared to the same period in 2012. As the Company continues its U.S clinical trial with RenalGuard, operating expenses are expected to continue to increase throughout 2013.

Net loss for the three months ended September 30, 2013, was $609,000, compared with $3,165,000 for the same period in 2012, an increase of $2,556,000 or 81%. Net changes in the fair market value of outstanding debentures, warrants and options resulted in a gain of $707,000 and $3,403,000 for the three and nine months ended September 30, 2013.

Readers are referred to, and encouraged to read in its entirety the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 to be filed with the Securities and Exchange Commission, which includes further detail on the above-referenced transactions and the Company's business plans and operations, financial condition and results of operations and need to raise additional capital.

About PLC Systems Inc.
PLC Systems Inc., headquartered in Milford, Mass., is a medical device company focused on innovative technologies for the cardiac and vascular markets. PLC's newest product, RenalGuard, has been developed to rapidly remove contrast dyes that are potentially toxic to patients undergoing certain cardiac and vascular imaging procedures. The Product is CE-marked and is being marketed in Europe and selected countries around the world. Two investigator-sponsored European studies have demonstrated RenalGuard's effectiveness at preventing Contrast-Induced Acute Kidney Injury (CI-AKI). RenalGuard is being studied in a pivotal trial in the U.S., as part of the FDA approval process. For more information, visit www.plcmed.com, or connect with the Company on Facebook, Twitter, LinkedIn, YouTube and Google+.

This press release contains "forward-looking" statements. For this purpose, any statements contained in this press release that relate to prospective events or developments are deemed to be forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "will" and similar expressions are intended to identify forward-looking statements. Our statements of our objectives are also forward-looking statements. While we may elect to update forward-looking statements in the future, we specifically disclaim any obligation to do so, even if our estimates change, and you should not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release. Actual results could differ materially from those indicated by such forward-looking statements as a result of a variety of important factors, including that we may not receive necessary regulatory approvals to market our RenalGuard product or that such approvals may be withdrawn, the U.S. clinical trial for RenalGuard may not be completed in a timely fashion, if at all, or, if this clinical trial is completed, it may not produce clinically significant or meaningful results, the RenalGuard product may not be commercially accepted, operational changes, the need for additional financing in the next several months, competitive developments may affect the market for our products, regulatory approval requirements may affect the market for our products, and additional risk factors described in the "Forward Looking Statements" section of our Annual Report on Form 10-K for the year ended December 31, 2012, a copy of which is on file with the SEC.

PLC Systems, PLC Medical Systems, PLC, RenalGuard and RenalGuard Therapy are trademarks of PLC Systems Inc.

(In thousands, except per share data)
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
    2013     2012     2013     2012  
Revenues   $ 348     $ 212     $ 1,069     $ 595  
Cost of revenues     124       84       438       308  
Gross profit     224       128       631       287  
Operating expenses:                                
  Selling, general and administrative     945       674       2,595       1,899  
  Research and development     549       549       1,661       1,618  
    Total operating expenses     1,494       1,223       4,256       3,517  
Loss from operations     (1,270 )     (1,095 )     (3,625 )     (3,230 )
Other income (expense):                                
  Interest expense     (63 )     (137 )     (264 )     (369 )
  Foreign currency transaction gains (losses)     16       17       9       2  
  Financing costs associated with convertible notes     --       (80 )     --       (80 )
  Change in fair value of warrant and option liabilities     1,078       (1,117 )     3,192       (3,517 )
  Change in fair value of convertible notes     1,620       (757 )     3,485       (4,218 )
  Loss on extinguishment of convertible notes     (1,991 )     --       (3,274 )     --  
  Other income     1       4       4       24  
    Total other income (expense)     661       (2,070 )     3,152       (8,158 )
Net loss   $ (609 )   $ (3,165 )   $ (473 )   $ (11,388 )
Net loss per weighted average share, basic   $ (0.01 )   $ (0.10 )   $ (0.01 )   $ (0.37 )
Weighted average shares outstanding:                                
  Basic     76,902       30,397       60,923       30,912  
(in thousands)
    June 30,
    December 31,
Cash and cash equivalents   $ 1,404     $ 258  
Total current assets     2,431       1,020  
Total assets     2,845       1,091  
Total current liabilities     828       1,140  
Total liabilities     13,073       13,038  
Stockholders' deficit     (10,588 )     (11,947 )