In early trading today, shares of ATS Medical, Inc. (NASDAQ: ATSI) were down 4 cents at $2.17 per share on light volume.
Recent company news includes a private placement for $16.25 million announced last Friday, March 16th. ATS Medical plans to issue 8,125,000 shares of common stock at a price of $2.00 per share, together with warrants to purchase approximately 3,250,000 shares at an exercise price of $2.40 per share.
The shares were priced at a discount of 14 cents to the closing price of $2.14 on March 15, 2007. The warrant coverage in the private placement is 40 percent, and the gross proceeds represent 18.5 percent of the total market capitalization of ATS Medical.
The company plans to use the gross proceeds for working capital and general corporate purposes. RBC Capital served as the company’s sole placement agent in the deal. On the day of the announcement, ATS Medical shares spiked up to $2.21 per share and closed at $2.17 per share.
The private placement is subject to customary closing conditions, and the securities issued in the deal have not been registered with the SEC. The company has agreed to file a registration statement with the SEC, no later than forty-five days after the closing, covering the shares of common stock issued in the private placement.
On March 5th, ATS Medical announced its fourth quarter and year end results. For the fourth quarter, the company reported revenues of $10.7 million, up 8.1% from $9.9 million reported for the same quarter of 2005. The net loss for the quarter was $6.1 million, or $0.15 per share compared with $3.2 million or $0.10 per share net loss in the fourth quarter of 2005.
Michael Dale, chairman and chief executive of ATS Medical, had the following comments about the financial results. “2006 represents another year of progress towards our objective of establishing ATS Medical as a leading provider of innovative solutions in the field of cardiac surgery. Throughout 2006 we successfully executed our strategy to diversify our revenue and increase sales derived from products outside of our core mechanical heart valve business.”
The company’s outlook for 2007 includes revenue growth of approximately 15 percent compared to 2006 and gross profit of 60 percent. Mr. Dale added, “We see mechanical heart valve revenue growth in the range of 5-10% and non-mechanical heart valve product revenue growth of greater than 20%. As the mechanical heart valve market becomes more competitive, the significance of our strategy to diversify into other product categories will be magnified.”
On March 5th – the day of the fourth quarter announcement – ATS Medical shares fluctuated between $2.36 and $2.40 on light volume and closed at $2.38 per share.