EPMD EP Medsystems (MM)

EP MedSystems, Inc. (NASDAQ: EPMD), today announced financial results for the three months ended March 31, 2007. Revenue for the first quarter of 2007 was $3,544,000 a decrease of $534,000 or 13% from the $4,078,000 reported in the three months ended March 31, 2006. In the first quarter of 2006, the Company had approximately $705,000 of nonrecurring sales to our Japanese distributor. Gross margin in the first quarter was 67% as compared to 61% for the same period in 2006, primarily due to higher average selling prices. The net loss for the quarter was $1,509,000, as compared to $1,494,000 reported in the first quarter of 2006. The basic and diluted loss per share for the three months ended March 31, 2007, was $0.05 compared to $0.06 in the same period in 2006. Cash and cash equivalents as of March 31, 2007 were $7,709,000, a decrease of $34,000 when compared to the $7,743,000 on hand as of December 31, 2006. The Company also reported positive cash flow from operations of $48,000 primarily through a reduction in accounts receivable. David Bruce, EP MedSystems' President and Chief Executive Officer commented, �We�re satisfied with our improvements in working capital, higher average selling prices and increased gross margins this quarter. We believe our competitive position is improving and we�re focused on growing through market penetration of our recently introduced products: the ViewMate II Intracardiac ultrasound system, MapMate interface for EP Mapping systems and the NurseMate viewing station.� About EP MedSystems: EP MedSystems develops and markets cardiac electrophysiology ("EP") products used in visualizing, diagnosing and treating certain cardiac rhythm disorders. The Company's EP product line includes the EP-WorkMate Electrophysiology Workstation, the MapMate Navigation Interface, the NurseMate Remote Review Charting Station, the EP-4 Computerized Cardiac Stimulator, fixed and deflectable diagnostic electrophysiology catheters and related disposable supplies, and the ViewMate II intracardiac ultrasound catheter imaging system. For more information, visit our website at www.epmedsystems.com. Forward Looking Statements: This Release may contain certain statements of a forward-looking nature relating to future events or the future financial performance of the Company. Forward-looking statements include information concerning our possible or assumed future results of operations and statements preceded by, followed by or including the words �believes�, �expects�, �anticipates�, �intends�, �plans�, �estimates�, or similar expressions. Such forward-looking statements are based on our management�s beliefs and assumptions and on information currently available to our management. Such forward-looking statements are only predictions and are subject to risks and uncertainties that could cause actual results or events to differ materially and adversely from the events discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, EP MedSystems' history of losses, uncertainty of market acceptance of our products and level of sales, uncertainty of future profitability and future liquidity needs; possible fines costs or penalties that may be incurred in connection with the government inquires and investigations and risks regarding regulatory approvals and demand for new and existing products, as stated in the Company's Annual Report filed on Form 10-K and quarterly reports filed on Form 10-Q. EP MedSystems cautions investors and others to review the cautionary statements set forth in this press release and in EP MedSystems� reports filed with the Securities and Exchange Commission and cautions that other factors may prove to be important in affecting the EP MedSystems� business and results of operations. Readers are cautioned not to place undue reliance on this press release and other forward-looking statements, which speak only as of the date of this release. EP MedSystems undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. EP MEDSYSTEMS, INC. SELECTED FINANCIAL DATA (Unaudited) Three Months Ended March 31, Income Statement Data 2007� 2006� Net Sales $3,544,000� $4,078,000� Cost of products sold 1,157,000� 1,588,000� Gross Profit 2,387,000� 2,490,000� Operating expenses � Sales and marketing 2,310,000� 2,403,000� General and administrative 946,000� 863,000� Research and development 665,000� 698,000� Total operating expenses 3,921,000� 3,964,000� � Loss from operations (1,534,000) (1,474,000) Interest expense, net 25,000� (20,000) � Net Loss $(1,509,000) $(1,494,000) � Basic and diluted loss per share $(0.05) $(0.06) � Weighted Average Shares Outstanding 30,365,236� 26,165,556� � Balance Sheet Data At March 31, 2007 At March 31, 2006 Cash and cash equivalents 7,709,000� $12,375,000� Working capital 8,910,000� 16,189,000� Total assets 16,927,000� 22,942,000� Total liabilities 6,029,000� 6,226,000� Shareholder�s equity 10,898,000� 16,716,000�