SOURCE: Trimedyne, Inc.

February 13, 2007 12:37 ET

Trimedyne Reports a Significant Increase in Profit for the Quarter Ended December 31, 2006; Trimedyne's 6th Consecutive Profitable Quarter

LAKE FOREST, CA -- (MARKET WIRE) -- February 13, 2007 -- TRIMEDYNE, INC. (OTCBB: TMED) today reported a profit of $166,000 for the quarter ended December 31, 2006, almost twelve times the profit of $14,000 for the same quarter of the prior year. The fourth calendar quarter of 2006 is the first quarter of Trimedyne's current fiscal year and represents Trimedyne's 6th consecutive profitable quarter.

Revenues for the quarter were $1,425,000, compared to revenues of $1,785,000 for the prior year's quarter. The 20% decline in revenues was due to a $375,000 decrease in laser sales in the current quarter, as Trimedyne is concentrating its resources on preparing for the production and introduction of its new, disposable, side firing laser fiber, which has been cleared for sale by the FDA. While sales of lasers add significant dollars to revenues, lasers typically carry much smaller profit margins than disposable laser fibers.

Glenn D. Yeik, President of Trimedyne, said, "The increase in profit in the current quarter was due to substantially larger royalties on sales of fibers from Lumenis, Ltd. and improved efficiencies in manufacturing fibers in Trimedyne's new production facility. Trimedyne's gross profit in the current quarter was 45% of sales, versus 36% of sales in the year earlier quarter."

Mr. Yeik added, "We expect to see a significant increase in revenues and profits when Boston Scientific Corporation and Lumenis begin marketing Trimedyne's new side firing laser fiber as an accessory to Lumenis' Holmium lasers for the treatment of benign prostate hyperplasia or 'BPH,' commonly called an enlarged prostate. BPH affects about 50% of men over age 55 and a higher percentage at older ages. The worldwide market for treating BPH is estimated to exceed $700 million per year."

Shipments of the new fiber to Boston Scientific and Lumenis are expected to commence when Boston Scientific and Lumenis complete their review of Trimedyne's manufacturing and quality processes and their testing of the new fiber, which is presently anticipated to occur late in the second calendar quarter of 2007.

Trimedyne plans to commence marketing a similar version of the new fiber under its VaporMAX® trademark as an accessory to its Holmium lasers for the treatment of BPH at about the same time.

Trimedyne manufactures proprietary Holmium lasers and patented fiber optic laser devices for a variety of minimally invasive surgical procedures, many of which are performed on an outpatient basis at substantially less cost than conventional surgery. For product, press release, financial and other information, please visit Trimedyne's 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," "may," "could" and others. Such statements may involve various risks and uncertainties, some of which may be discussed in the Company's Form 10-K-SB for the year ended September 30, 2006 and subsequently filed 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.


                                 TRIMEDYNE, INC.
                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

                                     ASSETS
                                                              December 31,
                                                                  2006
                                                             -------------
Current assets:
  Cash and cash equivalents                                   $  3,815,000
  Trade accounts receivable, net of allowance for
   doubtful accounts of $12,000                                    573,000
  Inventories                                                    2,775,000
  Other current assets                                             222,000
                                                              ------------
   Total current assets                                          7,385,000

  Note due from related party                                       31,000
  Property and equipment, net                                      893,000
  Other                                                             39,000
  Goodwill                                                         544,000
                                                              ------------
                                                              $  8,892,000
                                                              ============
                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                            $    285,000
  Accrued expenses                                                 324,000
  Deferred revenue                                                  38,000
  Accrued warranty                                                  18,000
  Notes payable and current portion of long-term debt               19,000
                                                              ------------
    Total current liabilities                                      684,000

Senior convertible secured notes due to officer                    200,000
Accrued interest due to officer                                    117,000
Deferred rent                                                       95,000
Long-term debt, net of current portion                               1,000
                                                              ------------

    Total liabilities                                            1,097,000
                                                              ------------
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, 17,421,511 shares issued,
    17,319,902 shares outstanding                                  175,000
  Additional paid-in capital                                    50,990,000
  Accumulated deficit                                          (42,657,000)
                                                              ------------
                                                                 8,508,000
  Treasury stock, at cost (101,609 shares)                        (713,000)
                                                              ------------

   Total stockholders' equity                                    7,795,000
                                                              ------------

                                                              $  8,892,000
                                                              ============



                                 TRIMEDYNE, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)


                                                    Three Months Ended
                                                       December 31,
                                                   2006           2005
                                               ------------   ------------
Net revenues                                   $  1,425,000   $  1,785,000
Cost of revenues                                    779,000      1,148,000
                                               ------------   ------------
  Gross profit                                      646,000        637,000

Operating expenses:
 Selling, general and administrative                479,000        580,000
 Research and development                           158,000        145,000
                                               ------------   ------------
   Total operating expenses                         637,000        725,000
                                               ------------   ------------

Income (loss) from operations                         9,000        (88,000)

Other income, net                                   157,000        103,000
                                               ------------   ------------

Income before income taxes                          166,000         15,000

Provision for income taxes                               --          1,000
                                               ------------   ------------

Net income                                     $    166,000   $     14,000
                                               ============    ===========

Net income per share:
  Basic                                        $       0.01   $         --
                                               ============   ============
  Diluted                                      $       0.01   $         --
                                               ============   ============

Weighted average number of
 shares outstanding:

   Basic                                         16,537,495     14,704,540
                                               ============   ============
   Diluted                                       17,736,491     15,445,735
                                               ============   ============

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