Michael P. Kaminski, president and chief executive officer, said, During the first quarter, we demonstrated strong revenue growth, exceptionally strong margins on all our products, and a significant uptick in recurring revenue, driven primarily from the launch of the magnetic irrigated catheter. Additionally, the organization continues to focus on key initiatives and drive robust processes resulting in an improvement in operating expenses from prior year.
The commercial rollout of the magnetic irrigated catheter in Europe and in the U.S. is proceeding very well, Kaminski added. All European sites are launched and the rollout began in early March for the U.S. sites. Utilization increased by approximately 40% in March compared with January, reflecting the rapid ramp-up of usage in the U.S. Early clinical results of the magnetic irrigated catheter usage have been positive. Electrophysiologists are pleased with the ability of the catheter to deliver effective transmural lesions. Some of the initial results will be presented at the upcoming Heart Rhythm Society conference in Boston, Kaminski said.
We continue to see a marked increase in interest in our Odyssey and Cinema systems not associated with a Niobe platform. The pipeline for our Standard Cath Lab Odyssey systems has grown and we anticipate a pick up in these orders throughout the year, continued Kaminski.
Overall, we are pleased with the results of the first quarter, but recognize there is more work to do. We are energized by the release of our new products and even in light of the current macro trends, are optimistic regarding 2009, Kaminski concluded.
First Quarter 2009 Financial Performance
Gross margin for the quarter was $7.7 million, or 69% of revenue, against $4.6 million, or 65% of revenue in the first quarter of 2008.
Total first quarter operating expenses decreased 17% to $14.8 million, against $17.8 million in the first quarter of 2008. Most notable reductions occurred in research, development and general and administrative spending, while expenditures for sales and marketing support continued at near prior year levels.
The weighted average shares for the recent first quarter totaled 41.3 million against 36.5 million in the first quarter of last year. The increase was due in large part to the issuance of 4.4 million shares as part of two concurrent private placements of stock completed in December 2008.
Cash used in operations was $10.4 million for the first quarter of 2009. Cash used in operations during the second quarter of 2009 is expected to be significantly lower than the first quarter of 2009. Cash and equivalents at March 31, 2009 totaled $18.8 million, against $30.4 million at December 31, 2008. Total debt amounted to $29.2 million, including $13.2 million drawn against the company’s $25 million line of credit.
