##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 28, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Commission file number: 000-51348
 ev3 Inc.
  Delaware
    
    32-0138874(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 9600 54th Avenue North, Suite 100
Plymouth, Minnesota 55442
 (763) 398-7000
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



ev3 Inc.
FORM 10-Q
For the Quarterly Period Ended September 28, 2008
 TABLE OF CONTENTS
 Description
    
    
    
    PagePART I.
    
    FINANCIAL INFORMATIONITEM 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 28, 2008 (unaudited) and December 31, 2007
    
    1Consolidated Statements of Operations for the three and nine months ended
September 28, 2008 and September 30, 2007 (unaudited)
    
    2Consolidated Statements of Cash Flows for the nine months ended September 28, 2008
and September 30, 2007 (unaudited)
    
    3Notes to the Consolidated Financial Statements
    
    4ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    16ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    31ITEM 4.
    
    Controls and Procedures
    
    32PART II.
    
    OTHER INFORMATIONITEM 1.
    
    Legal Proceedings
    
    33ITEM 1A.
    
    Risk Factors
    
    33ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    34ITEM 3.
    
    Defaults Upon Senior Securities
    
    34ITEM 4.
    
    Submission of Matters to a Vote of Security Holders
    
    35ITEM 5.
    
    Other Information
    
    35ITEM 6.
    
    Exhibits
    
    35SIGNATURE PAGE
    
    36Exhibit Index
    
    37EXHIBIT 10.4EXHIBIT 10.5EXHIBIT 10.6EXHIBIT 10.7EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  
 This report contains not only historical information, but also forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by those
sections. We refer you to the information under the heading Part I. Item 2. Managements
Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking
Statements.
 In this report, references to ev3, the company, we, our or us in this report, unless the
context otherwise requires, refer to ev3 Inc. and its subsidiaries.
 All trademarks or trade names referred to in this report are the property of their respective
owners.




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM I. FINANCIAL STATEMENTS
 ev3 Inc.
 
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except per share amounts)
 September 28,
    
    
    December 31,2008
    
    
    2007(unaudited)AssetsCurrent assetsCash and cash equivalents
    
    $
    45,947
    
    
    $
    81,060Short-term investments
    
    
    
    
    
    
    9,744Accounts receivable, less allowances of $7,536 and $6,783, respectively
    
    
    73,593
    
    
    
    66,170Inventories, net
    
    
    56,269
    
    
    
    64,044Prepaid expenses and other assets
    
    
    6,773
    
    
    
    6,371Other receivables
    
    
    695
    
    
    
    981Total current assets
    
    
    183,277
    
    
    
    228,370Restricted cash
    
    
    1,442
    
    
    
    2,204Property and equipment, net
    
    
    33,643
    
    
    
    37,985Goodwill
    
    
    598,448
    
    
    
    586,648Other intangible assets, net
    
    
    198,506
    
    
    
    231,000Other assets
    
    
    467
    
    
    
    899Total assets
    
    $
    1,015,783
    
    
    $
    1,087,106Liabilities and stockholders equityCurrent liabilitiesAccounts payable
    
    $
    18,366
    
    
    $
    21,511Accrued compensation and benefits
    
    
    28,388
    
    
    
    35,301Accrued liabilities
    
    
    25,455
    
    
    
    49,429Deferred revenue
    
    
    
    
    
    
    9,347Current portion of long-term debt
    
    
    2,500
    
    
    
    3,571Total current liabilities
    
    
    74,709
    
    
    
    119,159Long-term debt
    
    
    7,083
    
    
    
    6,429Other long-term liabilities
    
    
    5,381
    
    
    
    3,037Total liabilities
    
    
    87,173
    
    
    
    128,625Stockholders equityCommon stock, $0.01 par value, 300,000,000 shares authorized, shares
issued and outstanding: 105,896,421 shares at September 28, 2008 and
105,078,769 at December 31, 2007
    
    
    1,059
    
    
    
    1,051Additional paid in capital
    
    
    1,753,572
    
    
    
    1,739,064Accumulated deficit
    
    
    (825,541
    )
    
    
    (781,039
    )Accumulated other comprehensive loss
    
    
    (480
    )
    
    
    (595
    )Total stockholders equity
    
    
    928,610
    
    
    
    958,481Total liabilities and stockholders equity
    
    $
    1,015,783
    
    
    $
    1,087,106
  1




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##### Table of Contents



ev3 Inc.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollars in thousands, except per share amounts)
 (unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 28,
    
    
    September 30,
    
    
    September 28,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007SalesProduct sales
    
    $
    100,018
    
    
    $
    65,060
    
    
    $
    296,577
    
    
    $
    191,955Research collaboration
    
    
    7,011
    
    
    
    
    
    
    
    19,426
    
    
    
    Net sales
    
    
    107,029
    
    
    
    65,060
    
    
    
    316,003
    
    
    
    191,955Operating expenses:Product cost of goods sold
    
    
    36,182
    
    
    
    23,097
    
    
    
    102,442
    
    
    
    65,916Research collaboration
    
    
    2,100
    
    
    
    
    
    
    
    5,647
    
    
    
    Sales, general and administrative
    
    
    53,005
    
    
    
    45,353
    
    
    
    178,769
    
    
    
    125,372Research and development
    
    
    12,133
    
    
    
    10,708
    
    
    
    37,913
    
    
    
    29,464Amortization of intangible assets
    
    
    8,101
    
    
    
    3,952
    
    
    
    24,285
    
    
    
    11,916Intangible asset impairment
    
    
    
    
    
    
    
    
    
    
    10,459
    
    
    
    Loss (gain) on sale or disposal of assets, net
    
    
    116
    
    
    
    
    
    
    
    116
    
    
    
    (988
    )Special charges
    
    
    
    
    
    
    20,183
    
    
    
    
    
    
    
    20,183Total operating expenses
    
    
    111,637
    
    
    
    103,293
    
    
    
    359,631
    
    
    
    251,863Loss from operations
    
    
    (4,608
    )
    
    
    (38,233
    )
    
    
    (43,628
    )
    
    
    (59,908
    )Other (income) expense:Realized and unrealized gains on investments, net
    
    
    (142
    )
    
    
    
    
    
    
    (542
    )
    
    
    Interest (income) expense, net
    
    
    49
    
    
    
    (417
    )
    
    
    (307
    )
    
    
    (823
    )Other (income) expense, net
    
    
    2,279
    
    
    
    (1,554
    )
    
    
    192
    
    
    
    (2,066
    )Loss before income taxes
    
    
    (6,794
    )
    
    
    (36,262
    )
    
    
    (42,971
    )
    
    
    (57,019
    )Income tax expense
    
    
    516
    
    
    
    250
    
    
    
    1,531
    
    
    
    858Net loss
    
    $
    (7,310
    )
    
    $
    (36,512
    )
    
    $
    (44,502
    )
    
    $
    (57,877
    )Earnings per share:Net loss per common share (basic and diluted)
    
    $
    (0.07
    )
    
    $
    (0.60
    )
    
    $
    (0.43
    )
    
    $
    (0.98
    )Weighted average shares outstanding (basic and
diluted)
    
    
    104,474,600
    
    
    
    60,365,027
    
    
    
    104,276,029
    
    
    
    59,141,035
  2




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ev3 Inc.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands, except per share amounts)
 (unaudited)
 Nine Months EndedSeptember 28,
    
    
    September 30,2008
    
    
    2007Operating activitiesNet loss
    
    $
    (44,502
    )
    
    $
    (57,877
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    33,016
    
    
    
    17,403Provision for bad debts and sales returns
    
    
    1,840
    
    
    
    1,005Provision for inventory obsolescence
    
    
    7,304
    
    
    
    3,072Loss (gain) on sale or disposal of assets
    
    
    116
    
    
    
    (988
    )Gain on sale of investment
    
    
    (542
    )
    
    
    Stock compensation expense
    
    
    11,682
    
    
    
    7,329Intangible asset impairment
    
    
    10,459
    
    
    
    Change in operating assets and liabilities:Accounts receivable
    
    
    (8,550
    )
    
    
    (14,330
    )Inventories
    
    
    (832
    )
    
    
    (5,372
    )Prepaid expenses and other assets
    
    
    (194
    )
    
    
    (312
    )Accounts payable
    
    
    (3,431
    )
    
    
    2,010Accrued expenses and other liabilities
    
    
    (27,822
    )
    
    
    27,729Deferred revenue
    
    
    (9,043
    )
    
    
    Net cash used in operating activities
    
    
    (30,499
    )
    
    
    (20,331
    )Investing activitiesProceeds from sale of short-term investments
    
    
    9,744
    
    
    
    6,900Purchase of property and equipment
    
    
    (9,032
    )
    
    
    (6,518
    )Purchase of patents and licenses
    
    
    (2,250
    )
    
    
    (1,866
    )Purchase of distribution rights
    
    
    
    
    
    
    (6,500
    )Proceeds from sale of assets
    
    
    1,061
    
    
    
    2,005Acquisitions, net of cash acquired
    
    
    (7,500
    )
    
    
    Payments for
the acquisition of FoxHollow, net of cash acquired
    
    
    (127
    )
    
    
    (2,793
    )Change in restricted cash
    
    
    771
    
    
    
    687Net cash used in investing activities
    
    
    (7,333
    )
    
    
    (8,085
    )Financing activitiesProceeds from issuance of common stock
    
    
    
    
    
    
    44,542Proceeds from issuance of debt
    
    
    10,000
    
    
    
    5,000Payments on long-term debt
    
    
    (10,417
    )
    
    
    (1,607
    )Payments on capital lease obligations
    
    
    (117
    )
    
    
    (103
    )Debt issuance costs
    
    
    180
    
    
    
    Proceeds from exercise of stock options
    
    
    1,272
    
    
    
    4,831Proceeds from employee stock purchase plan
    
    
    1,903
    
    
    
    869Other
    
    
    (341
    )
    
    
    (14
    )Net cash provided by financing activities
    
    
    2,480
    
    
    
    53,518Effect of exchange rate changes on cash
    
    
    237
    
    
    
    181Net
(decrease) increase in cash and cash equivalents
    
    
    (35,113
    )
    
    
    25,283Cash and cash equivalents, beginning of period
    
    
    81,060
    
    
    
    24,053Cash and cash equivalents, end of period
    
    $
    45,947
    
    
    $
    49,336
  3




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ev3 Inc.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Description of Business
  2. Basis of Presentation
   FoxHollow
  Accounting Changes
    4




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##### Table of Contents



Other Recently Issued Accounting Principles
    3. Fair Value Measurements
  
    
    Level 1. Observable inputs such as quoted prices in active markets;
    
    Level 2. Inputs, other than the quoted prices in active markets, that are observable
either directly or indirectly; and
    
    Level 3. Unobservable inputs in which there is little or no market data, which require
the reporting entity to develop its own assumptions.
 5




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##### Table of Contents



Assets and Liabilities Measured at Fair Value on a Recurring Basis
  4. Stock-Based Compensation
  Three Months Ended
    
    
    Nine Months EndedSeptember 28,
    
    
    September 30,
    
    
    September 28,
    
    
    September 30,Stock-Based Compensation Charges:
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Product cost of goods sold
    
    $
    121
    
    
    $
    101
    
    
    $
    596
    
    
    $
    446Sales, general and administrative
    
    
    2,572
    
    
    
    2,100
    
    
    
    9,608
    
    
    
    6,166Research and development
    
    
    366
    
    
    
    269
    
    
    
    1,478
    
    
    
    717$
    3,059
    
    
    $
    2,470
    
    
    $
    11,682
    
    
    $
    7,329
   5. FoxHollow Acquisition
   6




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##### Table of Contents



October 4,2007Intangible assets
    
    $
    199,500Acquired in-process research and development
    
    
    70,700Tangible assets acquired, net of liabilities assumed
    
    
    144,956Goodwill
    
    
    441,887Estimated fair value of identifiable tangible and intangible assets and goodwill,
net of cash acquired and liabilities assumed
    
    $
    857,043
 Pro Forma Results of Operations
   Three Months Ended
    
    Nine Months EndedSeptember 30, 2007
    
    September 30, 2007Reported
    
    Pro forma
    
    Reported
    
    Pro formaNet sales
    
    $
    65,060
    
    
    $
    117,057
    
    
    $
    191,955
    
    
    $
    343,789Net loss
    
    $
    (36,512
    )
    
    $
    (53,221
    )
    
    $
    (57,877
    )
    
    $
    (83,641
    )Net loss per common share:Basic and diluted
    
    $
    (0.60
    )
    
    $
    (0.51
    )
    
    $
    (0.98
    )
    
    $
    ( 0.82
    )
 6. Restructuring
  7




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##### Table of Contents



Purchase Price Adjustments (EITF 95-3)Adjustments toBalance at
    
    
    Purchase Price
    
    
    
    
    
    
    Balance atDecember 31, 2007
    
    
    Allocation
    
    
    Amounts Paid
    
    
    September 28, 2008Workforce reductions
    
    $
    7,605
    
    
    $
    1,574
    
    
    $
    (7,048
    )
    
    $
    2,131Termination of contractual commitments
    
    
    2,476
    
    
    
    6,294
    
    
    
    (712
    )
    
    
    8,058Total
    
    $
    10,081
    
    
    $
    7,868
    
    
    $
    (7,760
    )
    
    $
    10,189
   Expensed (FAS 112)AmountsBalance at
    
    
    Charged to
    
    
    
    
    
    
    Balance atDecember 31, 2007
    
    
    Expense
    
    
    Amounts Paid
    
    
    September 28, 2008Workforce reductions
    
    $
    999
    
    
    $
    (120
    )
    
    $
    (879
    )
    
    $
    Total
    
    $
    999
    
    
    $
    (120
    )
    
    $
    (879
    )
    
    $
    
 7. Inventories
  September 28, 2008
    
    
    December 31, 2007Raw materials
    
    $
    11,781
    
    
    $
    18,003Work in-progress
    
    
    6,453
    
    
    
    3,946Finished goods
    
    
    49,724
    
    
    
    53,06367,958
    
    
    
    75,012Inventory reserve
    
    
    (11,689
    )
    
    
    (10,968
    )Inventory, net
    
    $
    56,269
    
    
    $
    64,044
 8. Property and Equipment, Net
  September 28, 2008
    
    
    December 31, 2007Machinery and equipment
    
    $
    28,646
    
    
    $
    27,405Office furniture and equipment
    
    
    18,456
    
    
    
    16,897Leasehold improvements
    
    
    16,293
    
    
    
    14,656Construction in progress
    
    
    5,540
    
    
    
    6,95768,935
    
    
    
    65,915Less:Accumulated depreciation and amortization
    
    
    (35,292
    )
    
    
    (27,930
    )Property and equipment, net
    
    $
    33,643
    
    
    $
    37,985
 8




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##### Table of Contents



9. Goodwill and Other Intangible Assets
  PeripheralVascular
    
    
    Neurovascular
    
    
    TotalBalance as of December 31, 2007
    
    $
    501,394
    
    
    $
    85,254
    
    
    $
    586,648Adjustment to goodwill related
to acquisition of
FoxHollow
    
    
    11,800
    
    
    
    
    
    
    
    11,800Balance as of September 28, 2008
    
    $
    513,194
    
    
    $
    85,254
    
    
    $
    598,448
   Weighted
    
    
    September 28, 2008
    
    
    December 31, 2007Average
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetUseful Life
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying(in years)
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountPatents and licenses
    
    
    5.0
    
    
    $
    13,989
    
    
    $
    (5,905
    )
    
    $
    8,084
    
    
    $
    13,802
    
    
    $
    (4,890
    )
    
    $
    8,912Developed technology
    
    
    10.0
    
    
    
    203,416
    
    
    
    (63,137
    )
    
    
    140,279
    
    
    
    202,416
    
    
    
    (50,213
    )
    
    
    152,203Trademarks and tradenames
    
    
    9.0
    
    
    
    12,222
    
    
    
    (4,206
    )
    
    
    8,016
    
    
    
    12,222
    
    
    
    (3,454
    )
    
    
    8,768Customer relationships
    
    
    10.0
    
    
    
    56,094
    
    
    
    (16,749
    )
    
    
    39,345
    
    
    
    56,094
    
    
    
    (13,094
    )
    
    
    43,000Distribution rights
    
    
    2.5
    
    
    
    9,274
    
    
    
    (6,492
    )
    
    
    2,782
    
    
    
    9,274
    
    
    
    (3,710
    )
    
    
    5,564Merck exclusivity (see Note
10)
    
    
    3.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,600
    
    
    
    (1,047
    )
    
    
    12,553Other intangible assets
    
    
    
    
    
    $
    294,995
    
    
    $
    (96,489
    )
    
    $
    198,506
    
    
    $
    307,408
    
    
    $
    (76,408
    )
    
    $
    231,000
  2008
    
    $
    29,1962009
    
    
    22,5162010
    
    
    19,5182011
    
    
    18,1042012
    
    
    18,047
 10. Intangible Asset Impairment
  9




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11. Long-Term Debt
  September 28, 2008
    
    
    December 31, 2007Term loan
    
    $
    9,583
    
    
    $
    10,000Less: current portion
    
    
    (2,500
    )
    
    
    (3,571
    )Total long-term debt
    
    $
    7,083
    
    
    $
    6,429
      10




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##### Table of Contents



Remaining 2008
    
    $
    6252009
    
    
    2,5002010
    
    
    2,5002011
    
    
    2,5002012
    
    
    1,458Total
    
    $
    9,583
 12. Other Comprehensive Loss
  Three Months Ended
    
    
    Nine Months EndedSeptember 28, 2008
    
    
    September 30, 2007
    
    
    September 28, 2008
    
    
    September 30, 2007Net loss
    
    $
    (7,310
    )
    
    $
    (36,512
    )
    
    $
    (44,502
    )
    
    $
    (57,877
    )Changes in foreign currency translation
    
    
    137
    
    
    
    (213
    )
    
    
    115
    
    
    
    (334
    )Total comprehensive loss
    
    $
    (7,173
    )
    
    $
    (36,725
    )
    
    $
    (44,387
    )
    
    $
    (58,211
    )
 13. Commitments and Contingencies
 Letters of Credit
  Contingencies
  Appriva Medical, Inc. Acquisition Litigation
  11




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FoxHollow Litigation
    12




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##### Table of Contents



14. Segment and Geographic Information
    13




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 28,
    
    
    September 30,
    
    
    September 28,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net salesNet product sales:Peripheral vascular:Atherectomy
    
    $
    20,992
    
    
    $
    
    
    
    $
    68,624
    
    
    $
    Stents
    
    
    26,772
    
    
    
    23,105
    
    
    
    77,932
    
    
    
    65,064Thrombectomy and embolic protection
    
    
    6,938
    
    
    
    5,368
    
    
    
    19,990
    
    
    
    20,029Procedural support and other
    
    
    12,184
    
    
    
    10,240
    
    
    
    35,243
    
    
    
    30,742Total peripheral vascular
    
    
    66,886
    
    
    
    38,713
    
    
    
    201,789
    
    
    
    115,835Neurovascular:Embolic products
    
    
    18,174
    
    
    
    14,698
    
    
    
    53,469
    
    
    
    40,451Neuro access and delivery products and other
    
    
    14,958
    
    
    
    11,649
    
    
    
    41,319
    
    
    
    35,669Total neurovascular
    
    
    33,132
    
    
    
    26,347
    
    
    
    94,788
    
    
    
    76,120Total net product sales
    
    
    100,018
    
    
    
    65,060
    
    
    
    296,577
    
    
    
    191,955Research collaboration:
    
    
    7,011
    
    
    
    
    
    
    
    19,426
    
    
    
    Total net sales
    
    $
    107,029
    
    
    $
    65,060
    
    
    $
    316,003
    
    
    $
    191,955Gross profitPeripheral vascular
    
    $
    39,480
    
    
    $
    23,421
    
    
    $
    124,442
    
    
    $
    69,502Neurovascular
    
    
    24,356
    
    
    
    18,542
    
    
    
    69,693
    
    
    
    56,537Research collaboration
    
    
    4,911
    
    
    
    
    
    
    
    13,779
    
    
    
    Total
    
    $
    68,747
    
    
    $
    41,963
    
    
    $
    207,914
    
    
    $
    126,039Operating expense
    
    
    73,355
    
    
    
    80,196
    
    
    
    251,542
    
    
    
    185,947Loss from operations
    
    $
    (4,608
    )
    
    $
    (38,233
    )
    
    $
    (43,628
    )
    
    $
    (59,908
    )
 September 28,
    
    
    December 31,2008
    
    
    2007Total assetsPeripheral vascular
    
    $
    879,114
    
    
    $
    936,348Neurovascular
    
    
    136,669
    
    
    
    150,758Total
    
    $
    1,015,783
    
    
    $
    1,087,106
  Three Months Ended
    
    
    Nine Months EndedSeptember 28,
    
    
    September 30,
    
    
    September 28,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Geographic DataNet SalesUnited States
    
    $
    70,452
    
    
    $
    38,312
    
    
    $
    208,773
    
    
    $
    113,028International
    
    
    36,577
    
    
    
    26,748
    
    
    
    107,230
    
    
    
    78,927Total net sales
    
    $
    107,029
    
    
    $
    65,060
    
    
    $
    316,003
    
    
    $
    191,955
 September 28,
    
    
    December 31,2008
    
    
    2007Long-lived AssetsUnited States
    
    $
    32,503
    
    
    $
    37,015International
    
    
    1,140
    
    
    
    970Total long-lived assets
    
    $
    33,643
    
    
    $
    37,985
 15. Related Party Transaction
  14




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16. Loss Per Common Share
   15




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Business Overview
      16




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Summary of Third Fiscal Quarter 2008 Financial Results and Outlook
  17




---



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
    
    Our net sales of $107.0 million for the third quarter 2008 included product net
sales of $66.9 million in our peripheral vascular segment, $33.1 million in our
neurovascular segment and $7.0 million of research collaboration revenue. Our
atherectomy business is still under some pressure due to heightened
competitive pressures and the related physician trialing of competitive devices. We expect our peripheral
vascular net sales to increase during the remainder of 2008 as compared to the same
period in 2007 due to market growth, specifically in our international markets,
including the continued penetration of our atherectomy products into international
markets, and increased market penetration of the EverFlex family of stents. We expect
our neurovascular net sales to increase during the remainder of 2008 as compared to the
same period in 2007 due to continued penetration of our Axium coil and neuro access and
delivery products, and increased market growth internationally.
    
    On a geographic basis, 66% of our net sales for the third quarter 2008 were
generated in the United States and 34% were generated outside the United States.
Changes in foreign currency rates had a positive impact of approximately $1.7 million
on third quarter 2008 net sales compared to third quarter 2007, principally resulting from the
strength of the U.S. dollar as compared to the Euro. We expect our international net
sales to increase during the remainder of 2008 as compared to the same period last year
primarily as a result of increased market penetration of the Axium coil and the
EverFlex family of stents and the continued penetration of atherectomy products into
international markets.
    
    During the third quarter 2008, we recognized $7.0 million in research collaboration
revenue. Of this amount, $2.0 million was a result of our agreement to accomplish an
orderly wind-down of our research collaboration activities. We expect to recognize
additional revenue of approximately $800,000 from wind-down activities in the fourth
quarter 2008.
    
    Our operating expenses were $111.6 million in the third quarter 2008. Although our
sales, general and administrative expenses and research and development expenses each
increased in absolute dollars in the third quarter 2008 compared to third quarter 2007,
each decreased as a percentage of net sales. We expect our sales, general and
administrative expenses, research and development expense and amortization of
intangible assets to decrease in absolute dollars in the remainder of 2008 as compared
to the same period in 2007. We expect sales, general and administrative expenses and
research and development expense each to continue to decline as a percentage of net
sales.
    
    Other (income) expense, net was an expense of $2.3 million in the third quarter
2008 compared to income of $1.6 million in the same period of 2007. The stronger U.S.
dollar compared to the Euro negatively impacted our Euro designated accounts receivable
in the third quarter 2008 and the continued volatility of foreign currency exchange
rates may continue to impact our operating results in future periods.
    
    Our net loss for the third quarter 2008 was $7.3 million, or $0.07 per common share.
Our focus for the remainder of 2008 is to improve our profitability.
 18




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
    
    Our cash and cash equivalents were $45.9 million at September 28, 2008, an increase
of $7.2 million compared to the end of the second quarter 2008. This increase was
primarily due to cash provided by operating activities during the third quarter 2008.
We believe our cash and cash equivalents and current financing arrangements will be
sufficient to meet our liquidity requirements through at least the next 12 months. We
will continue to focus our efforts on improving our cash position during the remainder
of 2008 however, the strength of the U.S. Dollar against various foreign currencies
and the general downtown of worldwide economic conditions may place pressure on certain
of our international customers and distributors which could delay cash flows
corresponding to those accounts receivable.
 
 19




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Results of Operations
  Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 28,
    
    
    September 30,
    
    
    Percent
    
    
    September 28,
    
    
    September 30,
    
    
    Percent2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeResults of Operations:SalesProduct sales
    
    $
    100,018
    
    
    $
    65,060
    
    
    
    53.7
    %
    
    $
    296,577
    
    
    $
    191,955
    
    
    
    54.5
    %Research collaboration
    
    
    7,011
    
    
    
    
    
    
    NM
    
    
    19,426
    
    
    
    
    
    
    NMNet sales
    
    $
    107,029
    
    
    $
    65,060
    
    
    
    64.5
    %
    
    $
    316,003
    
    
    $
    191,955
    
    
    
    64.6
    %Operating expenses:Product cost of goods sold (a)
    
    
    36,182
    
    
    
    23,097
    
    
    
    56.7
    %
    
    
    102,442
    
    
    
    65,916
    
    
    
    55.4
    %Research collaboration
    
    
    2,100
    
    
    
    
    
    
    NM
    
    
    5,647
    
    
    
    
    
    
    NMSales, general and
administrative (a)
    
    
    53,005
    
    
    
    45,353
    
    
    
    16.9
    %
    
    
    178,769
    
    
    
    125,372
    
    
    
    42.6
    %Research and development (a)
    
    
    12,133
    
    
    
    10,708
    
    
    
    13.3
    %
    
    
    37,913
    
    
    
    29,464
    
    
    
    28.7
    %Amortization of intangible
assets
    
    
    8,101
    
    
    
    3,952
    
    
    
    105.0
    %
    
    
    24,285
    
    
    
    11,916
    
    
    
    103.8
    %Intangible asset impairment
    
    
    
    
    
    
    
    
    
    NM
    
    
    10,459
    
    
    
    
    
    
    NMLoss (gain) on sale or
disposal of assets, net
    
    
    116
    
    
    
    
    
    
    NM
    
    
    116
    
    
    
    (988
    )
    
    NMSpecial charges
    
    
    
    
    
    
    20,183
    
    
    NM
    
    
    
    
    
    
    20,183
    
    
    NMTotal operating expenses
    
    
    111,637
    
    
    
    103,293
    
    
    
    8.1
    %
    
    
    359,631
    
    
    
    251,863
    
    
    
    42.8
    %Loss from operations
    
    
    (4,608
    )
    
    
    (38,233
    )
    
    
    (87.9
    )%
    
    
    (43,628
    )
    
    
    (59,908
    )
    
    
    (27.2
    )%Other (income) expense:Realized and unrealized gains
on investments, net
    
    
    (142
    )
    
    
    
    
    
    NM
    
    
    (542
    )
    
    
    
    
    
    NMInterest (income) expense, net
    
    
    49
    
    
    
    (417
    )
    
    NM
    
    
    (307
    )
    
    
    (823
    )
    
    NMOther (income) expense, net
    
    
    2,279
    
    
    
    (1,554
    )
    
    NM
    
    
    192
    
    
    
    (2,066
    )
    
    NMLoss before income taxes
    
    
    (6,794
    )
    
    
    (36,262
    )
    
    
    (81.3
    )%
    
    
    (42,971
    )
    
    
    (57,019
    )
    
    
    (24.6
    )%Income tax expense
    
    
    516
    
    
    
    250
    
    
    NM
    
    
    1,531
    
    
    
    858
    
    
    NMNet loss
    
    $
    (7,310
    )
    
    $
    (36,512
    )
    
    
    (80.0
    )%
    
    $
    (44,502
    )
    
    $
    (57,877
    )
    
    
    (23.1
    )%Net loss per common share (basic
and diluted)
    
    $
    (0.07
    )
    
    $
    (0.60
    )
    
    
    
    
    
    $
    (0.43
    )
    
    $
    (0.98
    )Weighted average shares
outstanding (basic and diluted)
    
    
    104,474,600
    
    
    
    60,365,027
    
    
    
    
    
    
    
    104,276,029
    
    
    
    59,141,035
 
 (a)
    
    Includes stock-based compensation charges of: Product cost of goods sold
    
    $
    121
    
    
    $
    101
    
    
    
    
    
    
    $
    596
    
    
    $
    446Sales, general and administrative
    
    
    2,572
    
    
    
    2,100
    
    
    
    
    
    
    
    9,608
    
    
    
    6,166Research and development
    
    
    366
    
    
    
    269
    
    
    
    
    
    
    
    1,478
    
    
    
    717$
    3,059
    
    
    $
    2,470
    
    
    
    
    
    
    $
    11,682
    
    
    $
    7,329
 20




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Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 28,
    
    
    September 30,
    
    
    Percent
    
    
    September 28,
    
    
    September 30,
    
    
    Percent2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeNET SALES BY SEGMENT:Net product sales:Peripheral vascular:Atherectomy
    
    $
    20,992
    
    
    $
    
    
    
    NM
    
    $
    68,624
    
    
    $
    
    
    
    NMStents
    
    
    26,772
    
    
    
    23,105
    
    
    
    15.9
    %
    
    
    77,932
    
    
    
    65,064
    
    
    
    19.8
    %Thrombectomy and embolic
protection
    
    
    6,938
    
    
    
    5,368
    
    
    
    29.2
    %
    
    
    19,990
    
    
    
    20,029
    
    
    
    (0.2
    )%Procedural support and other
    
    
    12,184
    
    
    
    10,240
    
    
    
    19.0
    %
    
    
    35,243
    
    
    
    30,742
    
    
    
    14.6
    %Total peripheral vascular
    
    
    66,886
    
    
    
    38,713
    
    
    
    72.8
    %
    
    
    201,789
    
    
    
    115,835
    
    
    
    74.2
    %Neurovascular:Embolic products
    
    
    18,174
    
    
    
    14,698
    
    
    
    23.6
    %
    
    
    53,469
    
    
    
    40,451
    
    
    
    32.2
    %Neuro access and delivery
products and other
    
    
    14,958
    
    
    
    11,649
    
    
    
    28.4
    %
    
    
    41,319
    
    
    
    35,669
    
    
    
    15.8
    %Total neurovascular
    
    
    33,132
    
    
    
    26,347
    
    
    
    25.8
    %
    
    
    94,788
    
    
    
    76,120
    
    
    
    24.5
    %Total net product
sales
    
    
    100,018
    
    
    
    65,060
    
    
    
    53.7
    %
    
    
    296,577
    
    
    
    191,955
    
    
    
    54.5
    %Research collaboration:
    
    
    7,011
    
    
    
    
    
    
    NM
    
    
    19,426
    
    
    
    
    
    
    NMTotal net sales
    
    $
    107,029
    
    
    $
    65,060
    
    
    
    64.5
    %
    
    $
    316,003
    
    
    $
    191,955
    
    
    
    64.6
    %
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 28,
    
    
    September 30,
    
    
    Percent
    
    
    September 28,
    
    
    September 30,
    
    
    Percent2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeNET SALES BY GEOGRAPHY:United States
    
    $
    70,452
    
    
    $
    38,312
    
    
    
    83.9
    %
    
    $
    208,773
    
    
    $
    113,028
    
    
    
    84.7
    %InternationalBefore foreign exchange impact
    
    
    34,842
    
    
    
    26,748
    
    
    
    30.3
    %
    
    
    99,496
    
    
    
    78,927
    
    
    
    26.1
    %Foreign exchange impact
    
    
    1,735
    
    
    
    
    
    
    
    
    
    
    
    7,734
    
    
    
    
    
    
    
    Total
    
    
    36,577
    
    
    
    26,748
    
    
    
    36.7
    %
    
    
    107,230
    
    
    
    78,927
    
    
    
    35.9
    %Total net sales
    
    $
    107,029
    
    
    $
    65,060
    
    
    
    64.5
    %
    
    $
    316,003
    
    
    $
    191,955
    
    
    
    64.6
    %
 Comparison of the Three Months Ended September 28, 2008 to the Three Months Ended September 30,
2007
 Net sales
 Net sales of peripheral vascular products
 21




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##### Table of Contents



Net sales of neurovascular products
 Research collaboration (revenue).
 Net sales by geography
 Product cost of goods sold
 Sales, general and administrative
 Research and development
 Amortization of intangible assets
 22




---



##### Table of Contents



Special charges.
 Realized and unrealized gains on investments, net.
 Interest (income) expense, net
 Other (income) expense, net
 Income tax expense
 Comparison of the Nine Months Ended September 28, 2008 to the Nine Months Ended September 30, 2007
 Net sales
 Net sales of peripheral vascular products
 Net sales of neurovascular products
 23




---



##### Table of Contents



Research collaboration (revenue).
 Net sales by geography
 Product cost of goods sold
 Sales, general and administrative.
 Research and development
 Amortization of intangible assets
 Intangible asset impairment.
 Realized and unrealized gains on investments, net.
 24




---



##### Table of Contents



Interest (income) expense, net
 Other (income) expense, net
 Income tax expense
 Liquidity and Capital Resources
 September 30,
    
    December 31,Balance Sheet Data
    
    2008
    
    2007(in thousands)Cash and cash equivalents
    
    $
    45,947
    
    
    $
    81,060Short-term investments
    
    
    
    
    
    
    9,744Total current assets
    
    
    183,277
    
    
    
    228,370Total assets
    
    
    1,015,783
    
    
    
    1,087,106Total current liabilities
    
    
    74,709
    
    
    
    119,159Total liabilities
    
    
    87,173
    
    
    
    128,625Total stockholders equity
    
    
    928,610
    
    
    
    958,481
 Cash, cash equivalents and short-term investments.
 Operating activities.
 Investing
activities.
 Financing activities.
 25




---



##### Table of Contents



Contractual cash obligations.
 Financing history.
 Credit facility.
   Other liquidity information
 26




---



##### Table of Contents



Credit risk.
 Related Party Transactions
  Critical Accounting Policies and Estimates
  Seasonality and Quarterly Fluctuations
   Off-Balance Sheet Arrangements
  27




---



##### Table of Contents



Recently Issued Accounting Pronouncements
       28




---



##### Table of Contents



Forward-Looking Statements
   
    
    History of operating losses, negative cash flow and failure to achieve future
profitability;
    
    Continued difficulties in integrating FoxHollows operations and failure to realize
anticipated cost savings, net sales and other potential benefits of the acquisition in
a timely manner or at all;
    
    The failure of our atherectomy products to achieve future revenues in amounts
historically experienced by FoxHollow prior to our acquisition of
FoxHollow;
    
    Changes in and failure to retain or replace senior management or other key employees
and the avoidance of business disruption and employee distraction as we execute our
restructuring activities, including the closing of our Redwood City, California
facility and our recent previous reductions in sales personnel and as we implement
reorganization efforts;
    
    Ability to implement, fund and achieve sustainable cost savings measures that will
better align our operating expenses with our anticipated net sales levels and
reallocate resources to better support growth initiatives;
    
    Failure to obtain additional capital when needed or on acceptable terms;
    
    Failure of our business strategy, which relies on assumptions about the market for
our products;
    
    Lack of market acceptance of new products;
    
    Decreased demand for our SilverHawk product;
    
    Fluctuations in foreign currency exchange rates, especially the effect of a stronger
U.S. dollar against the Euro, and interest rates;
    
    Delays in product introduction;
    
    Risks inherent in operating internationally and selling and shipping our products
and purchasing our products and components internationally;
    
    Exposure to assertions of intellectual property claims and failure to protect our
intellectual property;
    
    Disruption in our ability to manufacture our products, especially as we transition
manufacturing capabilities from our Redwood City, California facility to our Plymouth,
Minnesota and Irvine, California facilities;
    
    Ability of our key suppliers to provide us products or components or raw materials
for products resulting in our inability to supply market demand for our products;
 29




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##### Table of Contents




    
    Increases in prices for raw materials;
    
    Significant and unexpected claims under our EverFlex self-expanding stent worldwide
fracture-free guarantee program in excess of our reserves;
    
    Incurrence of additional debt, contingent liabilities and expenses in connection
with future acquisitions;
    
    Failure of our customers or patients to obtain third party reimbursement for their
purchases of our products;
    
    Consolidation in the healthcare industry, which could lead to demands for price
concessions or to the exclusion of some suppliers from certain of our markets;
    
    Failure to comply with applicable laws and regulations, to obtain and maintain
required regulatory approvals for our products in a cost-effective manner or at all and
to market our products in an appropriate manner, including without limitation failure
to comply with the Federal Anti-Kickback Statute and similar healthcare fraud and
abuse laws and the Foreign Corrupt Practices Act;
    
    Adverse changes in applicable laws or regulations;
    
    Exposure to adverse side effects from our products and product liability claims;
    
    Fluctuations in quarterly operating results as a result of seasonality and other
items, such as the timing and extent of promotional pricing or volume discounts; the
timing of larger orders by customers and the timing of shipment of such orders; changes
in average selling prices; the number and mix of products sold in the quarter; the
availability and cost of components and materials; and costs, benefits and timing of
new product introductions;
    
    Obligation to make significant milestone payments not currently reflected in our
financial statements;
    
    Reliance on independent sales distributors and sales associates to market and sell
our products in certain countries;
    
    Loss of customers;
    
    Expiration or termination of our distribution agreement with Invatec S.r.l. and our
inability to commercially launch on a timely basis our own products to replace the
Invatec products we distribute or any disruption in the supply of products of Invatec
S.r.l. that we distribute or our relationship with Invatec;
    
    Dependence upon a few of our products to generate a large portion of our net sales
and exposure if drug-eluting stents become a dominant therapy in the peripheral
vascular stent market and we are not able to develop or acquire a drug-eluting stent to
market and sell;
    
    Failure to develop innovative and successful new products and technologies;
    
    Highly competitive nature of the markets in which we sell our products and the
introduction of competing products;
    
    Inability to meet performance enhancement objectives, including efficiency and cost
reduction strategies;
    
    Reliance on our management information systems for inventory management,
distribution and other functions and to maintain our research and development and
clinical data;
    
    Failure to comply with our covenants under our loan and security agreement with
Silicon Valley Bank or inability to access funds under our revolving line of credit due
to borrowing base limitations;
    
    Inability to use net operating losses to reduce tax liability if we become
profitable;
    
    Absence of expected returns from the amount of intangible assets we have recorded
and the possibility of recording an impairment charge in the value of our goodwill and
other intangible assets due to the recent substantial decline in our market
capitalization;
    
    Changes in generally accepted accounting principles and changes resulting from the
application of the purchase method of accounting relating to our acquisition of
FoxHollow;
    
    Volatility and uncertainty in the capital markets and the availability of credit to
our distributors, customers and suppliers;
    
    Effects of pending and threatened litigation;
 30




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##### Table of Contents




    
    Conditions and changes in medical device industry or in general economic and
business conditions, including the effect of current worldwide economic conditions on
the number of elective healthcare procedures;
    
    Conflicts of interests due to our ownership structure; or
    
    Ineffectiveness of our internal controls.
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
   Foreign Currency Exchange Rate Risk
  31




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ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  32




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  Current worldwide economic conditions may adversely affect our business, operating results and
financial condition, as well as further decrease our stock price.
   A substantial portion of our assets consist of goodwill and other intangible assets and an
impairment in the value of our goodwill and other intangible assets would have the effect of
decreasing our earnings or increasing our losses.
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We face a risk of non-compliance with certain financial covenants in our loan agreement with
Silicon Valley Bank. If we are unable to meet the financial or other covenants under the agreement
or negotiate future waivers or amendments of the covenants, we could be in default under the
agreement, which would give SVB a range of remedies, including declaring all outstanding debt to be
due and payable, foreclosing on the assets securing the loan agreement and/or ceasing to provide
additional revolving loans or letters of credit, which could have a material adverse effect on us.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Recent Sales of Unregistered Equity Securities
  Issuer Purchases of Equity Securities
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  Exhibit No.
    
    Description10.1
    
    Offer Letter effective July 18, 2008 between ev3 Inc. and Pascal
E.R. Girin (Incorporated by reference to Exhibit 10.1 to ev3
Inc.s Current Report on Form 8-K filed with the Securities and
Exchange Commission on July 21, 2008 (File No. 000-51348))10.2
    
    Separation Agreement and Release of Claims dated as of July 18,
2008 between ev3 Endovascular, Inc. and Matthew Jenusaitis
(Incorporated by reference to Exhibit 10.2 to ev3 Inc.s Current
Report on Form 8-K filed with the Securities and Exchange
Commission on July 21, 2008 (File No. 000-51348))10.3
    
    Consulting Agreement dated as of July 18, 2008 between ev3
Endovascular, Inc. and Matthew Jenusaitis (Incorporated by
reference to Exhibit 10.3 to ev3 Inc.s Current Report on Form
8-K filed with the Securities and Exchange Commission on July 21,
2008 (File No. 000-51348))10.4
    
    ev3 Inc. Performance Incentive Compensation Plan (Filed herewith)10.5
    
    Form of Option Certificate under the ev3 Inc. Second Amended and
Restated 2005 Incentive Stock Plan (Filed herewith)10.6
    
    Form of Restricted Stock Grant Certificate under the ev3 Inc.
Second Amended and Restated 2005 Incentive Stock Plan (Filed
herewith)10.7
    
    Form of Stock Grant Certificate applicable to French Participants
under the ev3 Inc. Second Amended and Restated 2005 Incentive
Stock Plan (Filed herewith)31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-14(a) (Filed
herewith)31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-14(a) (Filed
herewith)32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Furnished herewith)32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Furnished herewith)
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##### Table of Contents



SIGNATURES
  November 6, 2008
    ev3 Inc.By:
    /s/ Robert J. PalmisanoRobert J. PalmisanoPresident and Chief Executive Officer
(principal executive officer) By:
    /s/ Patrick D. SpanglerPatrick D. SpanglerSenior Vice President and Chief Financial Officer

(principal financial and accounting officer) 36




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##### Table of Contents



ev3 Inc.
 QUARTERLY REPORT ON FORM 10-Q
 
 EXHIBIT INDEX
 Exhibit No.
    
    Description
    
    Method of Filing10.1
    
    Offer Letter effective July 18, 2008 between ev3 Inc. and
Pascal E.R. Girin
    
    Incorporated by reference to
Exhibit
10.1 to ev3 Inc.s Current Report
on
Form 8-K (filed with the Securities
and Exchange Commission
on July 21, 2008
(File No. 000-51348)10.2
    
    Separation Agreement and Release of Claims dated as of
July 18, 2008 between ev3 Endovascular, Inc. and Matthew
Jenusaitis
    
    Incorporated by reference to
Exhibit
10.2 to ev3 Inc.s Current Report
on
Form 8-K filed with the Securities
and Exchange Commission
on July 21, 2008
(File No. 000-51348)10.3
    
    Consulting Agreement dated as of July 18, 2008 between
ev3 Endovascular, Inc. and Matthew Jenusaitis
    
    Incorporated by reference to
Exhibit
10.3 to ev3 Inc.s Current Report
on
Form 8-K filed with the Securities
and Exchange Commission
on July 21, 2008
(File No. 000-51348)10.4
    
    ev3 Inc. Performance Incentive Compensation Plan
    
    Filed herewith10.5
    
    Form of Option Certificate under the ev3 Inc. Second
Amended and Restated 2005 Incentive Stock Plan
    
    Filed herewith10.6
    
    Form of Restricted Stock Grant Certificate under the ev3
Inc. Second Amended and Restated 2005 Incentive Stock
Plan
    
    Filed herewith10.7
    
    Form of Stock Grant Certificate applicable to French
Participants under the ev3 Inc. Second Amended and
Restated 2005 Incentive Stock Plan
    
    Filed herewith31.1
    
    Certification of Chief Executive Officer Pursuant to
Section
302 of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-
14(a)
    
    Filed herewith31.2
    
    Certification of Chief Financial Officer Pursuant to
Section
302 of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-
14(a)
    
    Filed herewith32.1
    
    Certification of Chief Executive Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906
of
the Sarbanes-Oxley Act of 2002
    
    Furnished herewith32.2
    
    Certification of Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906
of
the Sarbanes-Oxley Act of 2002
    
    Furnished herewith
 37