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TranS1 Inc. Reports Operating Results for the Third Quarter of 2007
 Third Quarter Highlights:
 469 TranS1 procedures performed
 Revenues increased 217% to a record $4.3 million compared to the third quarter of 2006
 Gross margin was 82.6%
 Non-GAAP loss per share of $0.11




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Conference Call
  Non-GAAP Measures




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About TranS1 Inc.
 ®
 Forward-Looking Statements




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TranS1, Inc.
Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
 Three Months Ended Sept. 30,
    
    
    Nine Months Ended Sept. 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    4,327
    
    
    $
    1,367
    
    
    $
    11,514
    
    
    $
    3,528Cost of revenue
    
    
    754
    
    
    
    334
    
    
    
    2,213
    
    
    
    949Gross profit
    
    
    3,573
    
    
    
    1,033
    
    
    
    9,301
    
    
    
    2,579Operating expenses:Research and development
    
    
    1,320
    
    
    
    1,025
    
    
    
    3,599
    
    
    
    3,118Sales and marketing
    
    
    3,780
    
    
    
    2,368
    
    
    
    10,616
    
    
    
    6,318General and administrative
    
    
    812
    
    
    
    293
    
    
    
    1,895
    
    
    
    917Total operating expenses
    
    
    5,912
    
    
    
    3,686
    
    
    
    16,110
    
    
    
    10,353Operating loss
    
    
    (2,339
    )
    
    
    (2,653
    )
    
    
    (6,809
    )
    
    
    (7,774
    )Interest income
    
    
    125
    
    
    
    248
    
    
    
    468
    
    
    
    776Other income(expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (2,214
    )
    
    $
    (2,405
    )
    
    $
    (6,341
    )
    
    $
    (6,998
    )Net loss per common share
- basic and diluted
    
    $
    (0.87
    )
    
    $
    (0.99
    )
    
    $
    (2.54
    )
    
    $
    (2.89
    )Weighted average common
shares outstanding -
basic and diluted
    
    
    2,549
    
    
    
    2,421
    
    
    
    2,495
    
    
    
    2,419Stock-based compensation is included in operating expenses in the following categories:Cost of revenue
    
    $
    14
    
    
    
    
    
    
    $
    40
    
    
    
    Research and development
    
    
    179
    
    
    
    
    
    
    
    378
    
    
    
    Sales and marketing
    
    
    400
    
    
    
    
    
    
    
    1,117
    
    
    
    General and administrative
    
    
    121
    
    
    
    
    
    
    
    239
    
    
    
    $
    714
    
    
    
    
    
    
    $
    1,774
    
    
    
    




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2007
    
    
    2006GAAP net loss
    
    $
    (2,214
    )
    
    $
    (2,405
    )Stock based compensation
    
    
    714
    
    
    
    Non-GAAP net loss
    
    $
    (1,500
    )
    
    $
    (2,405
    )Shares used in computing GAAP loss per share
    
    
    2,549
    
    
    
    2,421Assumed conversion of preferred stock to common stock
    
    
    10,793
    
    
    
    10,793Shares used in computing non-GAAP loss per share
    
    
    13,342
    
    
    
    13,214Non-GAAP loss per share
    
    $
    (0.11
    )
    
    $
    (0.18
    )
 
 2007
    
    
    2006GAAP net loss
    
    $
    (6,341
    )
    
    $
    (6,998
    )Stock based compensation
    
    
    1,774
    
    
    
    Non-GAAP net loss
    
    $
    (4,567
    )
    
    $
    (6,998
    )Shares used in computing GAAP loss per share
    
    
    2,495
    
    
    
    2,419Assumed conversion of preferred stock to common stock
    
    
    10,793
    
    
    
    10,793Shares used in computing non-GAAP loss per share
    
    
    13,288
    
    
    
    13,212Non-GAAP loss per share
    
    $
    (0.34
    )
    
    $
    (0.53
    )




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TranS1, Inc.
Balance Sheets
(in thousands)
 September 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,304
    
    
    $
    5,034Short-term investments
    
    
    2,067
    
    
    
    9,928Accounts receivable
    
    
    3,822
    
    
    
    1,620Inventory
    
    
    3,703
    
    
    
    2,080Prepaid expenses and other assets
    
    
    1,600
    
    
    
    230Total current assets
    
    
    16,496
    
    
    
    18,892Property and equipment, net
    
    
    1,115
    
    
    
    1,112Total assets
    
    $
    17,611
    
    
    $
    20,004Liabilities and Stockholders Equity (Deficit)Current liabilities:Accounts payable
    
    $
    1,842
    
    
    $
    843Accrued expenses
    
    
    1,667
    
    
    
    601Total current liabilities
    
    
    3,509
    
    
    
    1,444Preferred stock
    
    
    40,089
    
    
    
    40,089Stockholders equity (deficit):Common stock
    
    
    
    
    
    
    Additional paid-in capital
    
    
    2,666
    
    
    
    820Notes receivable for common stock
    
    
    
    
    
    
    (38
    )Accumulated deficit
    
    
    (28,653
    )
    
    
    (22,311
    )Total stockholders equity (deficit)
    
    
    (25,987
    )
    
    
    (21,529
    )Total liabilities and stockholders equity (deficit)
    
    $
    17,611
    
    
    $
    20,004




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TranS1, Inc.
Statements of Cashflows
(in thousands)
(Unaudited)
 Nine Months Ended Sept. 30,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (6,341
    )
    
    $
    (6,998
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    410
    
    
    
    151Stock-based compensation
    
    
    1,774
    
    
    
    Changes in operating assets and liabilities:Increase in accounts receivable
    
    
    (2,199
    )
    
    
    (384
    )Increase in inventory
    
    
    (1,623
    )
    
    
    (1,120
    )(Increase) decrease in prepaid expenses
    
    
    (1,368
    )
    
    
    (71
    )Increase (decrease) in accounts payable
    
    
    1,001
    
    
    
    237Increase in accrued liabilities
    
    
    1,062
    
    
    
    329Net cash used in operating activities
    
    
    (7,284
    )
    
    
    (7,856
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (414
    )
    
    
    (384
    )Purchases of short-term investments
    
    
    (2,783
    )
    
    
    (10,130
    )Sales of short-term investments
    
    
    10,644
    
    
    
    8,090Net cash proved by (used in) investing activities
    
    
    7,447
    
    
    
    (2,424
    )Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    107
    
    
    
    Net cash provided by financing activities
    
    
    107
    
    
    
    Net increase (decrease) in cash and cash equivalents
    
    
    270
    
    
    
    (10,280
    )Cash and cash equivalents, beginning of period
    
    
    5,034
    
    
    
    20,544Cash and cash equivalents, end of period
    
    $
    5,304
    
    
    $
    10,264
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