SOURCE: Trimedyne, Inc.

May 24, 2010 13:50 ET

Trimedyne Reports Its Financial Results for the Quarter Ended March 31, 2010

LAKE FOREST, CA--(Marketwire - May 24, 2010) - TRIMEDYNE, INC. (OTCBB: TMED) today reported its financial results for the quarter ended March 31, 2010.

Revenues for the current quarter were $1,727,000, an increase of 5.8% from revenues of $1,632,000 for the prior year's quarter. The $95,000 increase in revenues was due to higher revenues from sales of fiber optic devices and service and rentals, offset by a small decrease in sales of lasers. The Company had a net loss of $307,000 or $0.02 per share for the current quarter, compared to a loss of $345,000 or $0.02 per share for the prior year quarter.

Commenting on the financial results for the quarter, Marvin P. Loeb, Sc.D., Chairman of Trimedyne, said, "We are pleased with the 5.8% increase in revenues in the current quarter over the year ago quarter, but we regret that we had a loss for the quarter, even though it was smaller than the loss for the same quarter of 2009 and about the same as the loss of $300,000 in the immediately preceding quarter.

"Our working capital has declined, and we incurred losses from developing our new side firing optical fiber and from operations during the past four years. We have taken steps to lower our expenses by reducing our personnel and overhead costs, and I volunteered to defer 15% of my compensation, beginning in April 2009. We renegotiated the lease on our facility in Lake Forest, California, which will result in a savings of more than $111,000 in rent expense through the next twelve months. However, we cannot assure that we will be able to further reduce our costs or achieve or maintain sales growth to reverse these losses. We plan to raise additional capital through the sale of notes, debentures, equity capital or other assets, but we cannot assure that our efforts to do so will be successful."

Dr. Loeb continued, "We developed a new side firing optical fiber for use with our 80 watt Holmium Lasers for the treatment of benign prostate hyperplasia or BPH, commonly called an enlarged prostate. We commenced a limited marketing release of the new fiber under our VaporMAX® trademark in April 2009, with a wider release to follow.

"BPH is a condition which affects an estimated 50% of men over age 55 and an increasing percentage of men at older ages. Worldwide, approximately 1.2 million men are presently treated each year in a surgical procedure using radiofrequency (RF), laser or other energy to remove excess prostate tissue, which is obstructing urine flow. The laser procedure is usually performed on an outpatient basis and reduces the adverse effects and requirements of the RF surgical procedure, which include hospitalization, bleeding, infections and the risks of general anesthesia, a blood transfusion, impotence and incontinence."

Dr. Loeb also advised, "To help our stockholders understand the long delay we encountered with Lumenis, Ltd. of Yokneam, Israel ('Lumenis') in their commencing to purchase our new side firing laser fibers, this is what transpired. We settled our lawsuit against Lumenis for patent infringement, unfair competition and trade libel, and we entered into a Terms of Settlement Agreement with Lumenis on June 23, 2003. Two years later, on August 24, 2005, we entered into an OEM Agreement with Lumenis. Under these Agreements, Lumenis is required to purchase from us all of its requirements for side firing optical fibers (emitting laser energy at an angle of 75 degrees or greater) and 75% of its requirements for angled firing optical fibers (emitting laser energy at an angle less than 75 degrees), subject to certain conditions.

"Lumenis is one of the world's largest manufacturers of medical lasers with annual sales of approximately $250 million. Lumenis markets its side firing fibers through Boston Scientific Corporation in the United States and Japan and through Lumenis' direct sales force and distributors in other countries. Under the Terms of Settlement Agreement, Lumenis is required to pay us a royalty of 7.5% of its quarterly sales of such fibers, except for fibers Lumenis purchases from us, until July 21, 2014.

"We have spent a significant amount of money to complete the development and testing of our new, reliable, durable and fast-vaporizing side firing optical fiber device, primarily for sale to Lumenis under the above-described Agreements. As of this date, Lumenis has not completed certain of the requirements of these Agreements, including the testing of 30 of our side firing fibers and reporting the results to us within the time period proscribed by the OEM Agreement, and Lumenis has not commenced its audit of our quality system.

"In response to this, in February 2010, we submitted an addendum to the OEM Agreement to Lumenis, setting forth firm timelines for completion of the above steps and Lumenis' commencing the purchasing of these devices from us, with monetary penalties during the implementation of the timelines and larger monetary penalties if these timelines are missed. As of this date, Lumenis has not agreed to the terms of such addendum, and therefore, we have given Lumenis until May 31, 2010 to execute this addendum, with whatever reasonable changes are made in the timelines to which the parties may mutually agree."

Trimedyne manufactures proprietary Holmium lasers and patented, disposable and reusable fiber optic laser energy delivery devices. For product, financial and other information, visit our website, http://www.trimedyne.com.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act:

Statements in this news release may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934, including words like "expect," "anticipate," "may," "could" and others. Such statements may involve various risks and uncertainties, some of which may be discussed in the Company's current 10-K Report and other SEC reports. There is no assurance such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.

                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (UNAUDITED)


                 ASSETS
                                      March 31, 2010    September 30, 2009
                                    ------------------  ------------------

Current assets:
  Cash and cash equivalents         $          822,000  $        1,621,000
  Trade accounts receivable,
   net of allowance for doubtful
   accounts of $12,000 at
   March 31, 2010 and
   September 30, 2009                          774,000             988,000
  Inventories                                2,656,000           2,266,000
  Other current assets                         122,000             226,000
                                    ------------------  ------------------
      Total current assets                   4,374,000           5,101,000

Property and equipment, net                  1,030,000           1,168,000
Other                                           80,000              87,000
Goodwill                                       544,000             544,000
                                    ------------------  ------------------
    Total Assets                    $        6,028,000  $        6,900,000
                                    ==================  ==================

    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                  $          384,000  $          449,000
  Accrued expenses                             455,000             497,000
  Deferred revenue                              84,000             100,000
  Accrued warranty                              40,000              54,000
  Income tax payable                            29,000              20,000
  Current portion of note payable
   and capital leases                          164,000             209,000
                                    ------------------  ------------------
    Total current liabilities                1,156,000           1,329,000

Note payable and capital leases,
 net of current portion                        151,000             232,000
Deferred rent                                   34,000              51,000
Long term warrant liability                     29,000                  --
                                    ------------------  ------------------

    Total liabilities                        1,370,000           1,612,000
                                    ------------------  ------------------
Commitments and contingencies

Stockholders' equity:
  Preferred stock - $0.01 par value,
   1,000,000 shares authorized, none
   issued and outstanding                           --                  --
  Common stock - $0.01 par value,
   30,000,000 shares authorized,
   18,467,569 shares issued at
   March 31, 2010 and
   September 30, 2009, 18,365,960
   shares outstanding at
   March 31, 2010 and
   September 30, 2009                          186,000             186,000
  Additional paid-in capital                51,232,000          51,461,000
  Accumulated deficit                      (46,047,000)        (45,646,000)
                                    ------------------  ------------------
                                             5,371,000           6,001,000
  Treasury stock, at cost
   (101,609 shares)                           (713,000)           (713,000)
                                    ------------------  ------------------

   Total stockholders' equity                4,658,000           5,288,000
                                    ------------------  ------------------

   Total liabilities and
    stockholder's equity            $        6,028,000  $        6,900,000
                                    ==================  ==================



                               TRIMEDYNE, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)

                         Three Months Ended          Six Months Ended
                             March 31,                   March 31,
                        2010          2009          2010          2009
                    ------------  ------------  ------------  ------------

Net revenues        $  1,727,000  $  1,632,000  $  3,381,000  $  3,242,000
Cost of revenues       1,126,000     1,074,000     2,202,000     2,150,000
                    ------------  ------------  ------------  ------------
  Gross profit           601,000       558,000     1,179,000     1,092,000

Operating expenses:
 Selling, general
  and administrative     659,000       673,000     1,288,000     1,389,000
 Research and
  development            316,000       318,000       621,000       614,000
                    ------------  ------------  ------------  ------------
   Total operating
    expenses             975,000       991,000     1,909,000     2,003,000
                    ------------  ------------  ------------  ------------

Loss from operations    (374,000)     (433,000)     (730,000)     (911,000)

Other income, net         71,000        87,000       132,000       125,000
                    ------------  ------------  ------------  ------------

Loss before
 provision for
 income taxes           (303,000)     (346,000)     (598,000)     (786,000)

Provision for
 income taxes              4,000        (1,000)        9,000         4,000
                    ------------  ------------  ------------  ------------

Net loss            $   (307,000) $   (345,000) $   (607,000) $   (790,000)
                    ============  ============  ============  ============

Net loss per share:
  Basic             $      (0.02) $      (0.02) $      (0.03) $      (0.04)
                    ============  ============  ============  ============
  Diluted           $      (0.02) $      (0.02) $      (0.03) $      (0.04)
                    ============  ============  ============  ============

Weighted average
 number of shares
 outstanding:

   Basic              18,365,960    18,365,960    18,365,960    18,365,960
                    ============  ============  ============  ============
   Diluted            18,365,960    18,365,960    18,365,960    18,365,960
                    ============  ============  ============  ============

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