Ats Medical — Investor Presentation (October 2005)
29 slides from Ats Medical's investor presentation, Oct 12, 2005
Slide 1: Focused right on cardiac surgery
Focused right on cardiac surgery. Nasdaq: ATSI
Slide 2: Safe-Harbor
Safe-Harbor THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES. SEE OUR SECURITIES AND EXCHANGE COMMISSION FILINGS FOR A DESCRIPTION OF MANY OF THE RISKS AND UNCERTAINTIES. THIS PRESENTATION HAS BEEN PREPARED SOLELY BY US AND IS SOLELY OUR RESP
Slide 3: Mission
MISSION Dedicated to creating a leading cardiac surgery platform by continuously "ADVANCING THE STANDARD" through collaboration with customers to provide superior products that improve quality of life for patients.
Slide 4: ATS Medical Overview
ATS MEDICAL OVERVIEW Established in September 1990 Headquartered in Minneapolis, MN NASDAQ traded company (ATSI) Market Mechanical Heart Valves May 1992: First Human Implant October 1994: U.S. Patent Issued October 2000: FDA Approval Today: 100,000+ valves implanted Core Mission & Objective Create a
Slide 5: ATS Value Drivers
ATS VALUE DRIVERS Public cardiac surgery pure-play Cardiac surgery platform with significant expansion potential Cardiac tissue ablation (Cryo, AF, etc) Blood collection and filtration Minimally invasive surgery (Percutaneous, etc) Heart valve repair Tissue valves? Tissue adhesives? CPB, Other? Stro
Slide 6: Cardiac Surgery by Market Segment
CARDIAC SURGERY BY MARKET SEGMENT Blood transfusion MICS CPB Surgical AF VAD TMR Other THV Allografts Repair MHV Heart Valve Therapy 600 75 115 400 Other Cardiac Surgery 150 350 600 75 150 25 100 1H 2005 Core business 1992 1H 2007 Q4 2005 Q1 2006 Q3 2005 $2.5+ Billion Market: Significant expansion o
Slide 7: New Management Execution
NEW MANAGEMENT EXECUTION 10.07.02 - New Management Mike Dale appointed President and CEO
Slide 8: The ATS Open Pivot Heart Valve
THE ATS OPEN PIVOT(r) HEART VALVE THE ATS OPEN PIVOT(r) HEART VALVE Clinical experience 100,000+ Implants 13 Yr clinical record 42 publications Proven performance Zero structural failures! 30% lower risk of stroke 50% less anticoagulation required Quiet function
Slide 9: Worldwide Market Share Growth
WORLDWIDE MARKET SHARE GROWTH Source: Piper Jaffray Equity Research Other ATS East 87 13 Other ATS East 99.2 0.8 30% CAGR Growth! October 2002 June 2005
Slide 10: 'Best of Class' Distribution
'BEST OF CLASS' DISTRIBUTION Experienced cardiac surgery sales and marketing 40+ Dedicated headcount in US Direct and agent based 28+ Dedicated headcount OUS Direct sales and management 65+ Exclusive distributors OUS Proven competitiveness Additional OUS 'go-direct' distribution opportunities
Slide 11: New Business Development 'Mission Fulfillment'
New Business Development 'Mission Fulfillment' Call point leverage Relationship enhancement Revenue diversification Cost structure leverage
Slide 12: Summary of Recent Business Development Activity
SUMMARY OF RECENT BUSINESS DEVELOPMENT ACTIVITY PARSUS April 2004: Agreement signed Real-time blood collection, filtration and transfusion device CryoCath November 2004: Agency agreement signed Cryo ablation of heart tissue Genesee Biomedical June 2005: Agreement signed Support ring for mitral valve
Slide 13: CryoCath: Surgical AF Opportunity
CRYOCATH: SURGICAL AF OPPORTUNITY Mitral Aortic CABG Potential US Market: $150 - $200 Million 57,215 Concomitant Procedures 23,400 30,240 3,575 LEFT ATRIAL ABLATION
Slide 14: CryoCath: The Surgical System
CRYOCATH: THE SURGICAL SYSTEM Clinical Indication Single- use probes for freezing tissue to -160oC in seconds Probes are malleable to conform to anatomy ATS Business Model US: Agent OUS: Distributor SurgiFrost 10 SurgiFrost 6 FrostByte
Slide 15: Regeneration Tech: Allograft Market Opportunity
REGENERATION TECH: ALLOGRAFT MARKET OPPORTUNITY Products Heart valve tissue Vein grafts 2004 Revenue $7.5 million @ 25% Yr Market Drivers Donor recovery Safety & quality Distribution network Market Opportunity ATS distribution RTI Quality and R&D GTP compliant FDA audited AATB certified CRY 12.2 ARC
Slide 16: Genessee Biomedical: Mitral Repair Opportunity
GENESSEE BIOMEDICAL: MITRAL REPAIR OPPORTUNITY Source: Piper Jaffray Equity Research Products Support rings for repair of mitral and tricuspid valves Market Highlights 15%+ annual growth Fastest growing segment Low technology barriers Market Opportunity ATS distribution Q1 2006 market launch Call po
Slide 17: PARSUS: Blood Filtration with Ultrasound
PARSUS(tm): BLOOD FILTRATION WITH ULTRASOUND PARSUS(tm): BLOOD FILTRATION WITH ULTRASOUND Blood loss during surgery Blood bank issues Cross contamination danger from transfusions Availability & cost Current Centrifuge methods Low efficacy ~50% emboli removal Slow- not real-time High tech support req
Slide 18: PARSUS: Blood Filtration with Ultrasound
PARSUS(tm): BLOOD FILTRATION WITH ULTRASOUND Benefits vs. Centrifuge Ultrasound provides ultra high quality filtration of emboli from blood Fast, easy to use, real-time 94% + efficacy! Atraumatic to blood cells Centrifuge PARSUS(tm) Technology Solution
Slide 19: PARSUS: System Overview
PARSUS(tm): SYSTEM OVERVIEW PARSUS(tm): SYSTEM OVERVIEW $150 Million Market One disposable set sold per cardiac surgery procedure
Slide 20: Financial Summary
Financial Summary
Slide 21: Highlights
HIGHLIGHTS Q2 Performance Quarterly sales of $9.3 million, up 23% US sales of $3.3 million, up 32% OUS sales of $6.1 million, up 19% Growing revenue diversification New product revenue equaled 6% 42% Gross margin vs. 28% Flat operating costs, $6.9 million Other considerations Solid Balance Sheet $6.
Slide 22: Revenue History and Projections
REVENUE HISTORY AND PROJECTIONS 2001 2002 2003 2004 2005 15.1 13.3 18.5 28 33.6 3% (12%) Revenue Growth 39% 52% 20-25%
Slide 23: Path to Profitability
PATH TO PROFITABILITY Mechanical Valve Market Share Capture 20%+ revenue growth Distribution expansion & development Marketing plan execution Lower Cost of Goods $1150 to $550 by end 2006 Move to self manufactured carbon components New Business Development Distribution leverage Surgical arrhythmia a
Slide 24: Cost of Goods
COST OF GOODS Current COGS per Valve 2006 COGS per Valve: Beginning 1st Qtr Fixed & Variable 1150 550 ~16k units remain of paid for inventory 52% Decrease
Slide 25: Gross Margin Profitability Projections
GROSS MARGIN PROFITABILITY PROJECTIONS 2004 2005 2006 Gross Profit 0.31 0.35 0.67 Operating Costs 0.67 0.63 0.51
Slide 26: Executive Team
EXECUTIVE TEAM Michael Dale, President & CEO Edwards Laboratories, St. Jude Medical, Cyberonics, & Endocardial Solutions Richard Curtis, VP of Mktg & Bus. Dev. Pharmacia Deltec, St. Jude Medical, Hill-Rom & Cardinal Health Marc Sportsman, VP of Sales Shiley, Inc. & St. Jude Medical Jack Judd, Chief
Slide 27: ATS Value Drivers
ATS VALUE DRIVERS Public cardiac surgery pure-play Cardiac surgery platform with significant expansion potential Cardiac tissue ablation (Cryo, AF, etc) Blood collection and filtration Minimally invasive surgery (Percutaneous, etc) Heart valve repair Tissue valves? Tissue adhesives? CPB, Other? Stro
Slide 28: Thank You
THANK YOU
Slide 29: Blood Filtration with Ultrasound (PARSUS)
Cream and blood mixture Outflow Outflow Outflow Inflow 350 mm channel BLOOD FILTRATION WITH ULTRASOUND (PARSUS)