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January 14, 1998 CUPERTINO, Calif., Jan. 14 /PRNewswire/ -- General Surgical Innovations, Inc. (GSI) (Nasdaq: GSII) today announced financial results for the fiscal 1998 second
quarter and six-month period ended December 31, 1997. Total revenues for the second quarter rose 21 percent to approximately
$2.3 million from $1.9 million for the second quarter of fiscal
1997. The company reported a net loss of approximately $(1.9)
million, or $(0.14) per share, compared to a net loss of $(237,000),
or $(0.02) per share, for the same quarter of fiscal 1997. For
the six-month period, total revenues were $4.6 million and the
net loss was $(3.2) million, or $(0.23) per share. GSI ended the
quarter with approximately $41.0 million in cash, cash equivalents
and available-for-sale securities. Revenues for the quarter included product sales to Ethicon Endo-Surgery,
a Johnson & Johnson company and the company's distribution partner
for hernia repair and stress incontinence, which were below the
contractual minimum orders and also includes a cash payment of
$860,000 pursuant to a mutual agreement. Second quarter revenues
also reflect one month of initial product sales of the recently
launched ENDOSAPH(TM) Vein Harvest System. Gregory D. Casciaro, President and Chief Operating Officer of
GSI, commented, "We are engaged in ongoing discussions with Ethicon
regarding the best strategy for increasing GSI's penetration of
the hernia repair and stress incontinence markets. Our balloon
dissection technology, which is used in minimally invasive surgeries
to repair hernias, has proven to be clinically effective and reduce
patient recuperation times. With over 1.4 million procedures performed
each year, we believe that this market represents an important
opportunity for GSI's technology." Added Casciaro, "We are also excited about the progress we made
this quarter in the cardiovascular surgery markets. In the subfascial
endoscopic perforator surgery (SEPS) market, we are currently
working with ten leading distributors who cover a total of 40
states and plan to engage additional partners to create the necessary
network to effectively capitalize on this opportunity. Our ENDOSAPH(TM)
Vein Harvest System for the minimally invasive harvesting of the
saphenous vein was introduced during the quarter at the American
College of Surgeons meeting. The product was commercially launched in December and is being
sold through our dedicated direct sales force. The initial positive
feedback we have received on this product is encouraging, and
we continue to focus our internal resources on expanding our presence
in this market in which more than 70 percent of the 700,000 coronary
artery bypass graft (CABG) procedures utilize the saphenous vein."
During the quarter, GSI also signed a worldwide distribution agreement
with Genzyme Surgical Products Corporation to distribute GSI's
balloon dissectors for use in plastic surgery (reconstructive
and aesthetic) procedures. In November, GSI received 510(k) approval from the United States
Food and Drug Administration (FDA) to market its dissector/expander
device. The company continues to work on completing development
of a product kit and plans to engage a corporate partner to market
and distribute this product. During the quarter, GSI also received
ISO 9001/EN 46001 Certification and the Conformite Europeene (CE)
Mark approval for its Spacemaker(R)balloon dissection systems,
which provide the regulatory approval necessary for commercialization
of its products in European Union countries. GSI's Spacemaker tissue dissection systems, based on the company's
patented balloon technology, rapidly and gently create surgical
working spaces by separating natural tissue planes without resorting
to blunt dissection used in conventional open surgery or minimally
invasive surgery conducted outside of a natural body cavity. In
procedures using Spacemaker dissectors, a surgeon creates a small
incision through which the balloon is inserted and placed between
naturally occurring tissue layers such as muscle, fat, and skin.
Subsequently, the balloon is filled to a specific volume with
air or saline, causing the desired dissection of the tissue planes.
The system is then removed and the dissected space can be insufflated
with gas to create a surgical operating space. Headquartered in Cupertino, California, General Surgical Innovations,
Inc. develops, manufactures, and sells tissue dissection systems
based on the company's patented balloon technology for minimally
invasive surgical procedures. The company's products are specifically
designed for endoscopic and laparoscopic techniques for use in
general, cardiovascular, orthopedic, cosmetic and reconstructive
surgeries to create an operating space at the surgical site, lessen
tissue damage and improve patient recovery time. The company has
developed a broad range of balloon shapes and sizes to be used
for various surgical techniques, procedures, and market segments.
GSI distributes its products worldwide through a network of distribution
partners and a direct sales force.
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