Possis Medical, Inc. Reports Fourth-Quarter Results; Company Meets Guidance and Achieves Sequential Quarterly Growth

Possis Medical, Inc. (NASDAQ:POSS) today reported salesof $16.3 million for the fourth quarter ended July 31, 2005, versus$20.0 million in the year-ago period, and $15.1 million in the thirdquarter of fiscal 2005. U.S. AngioJet(R) Rheolytic(TM) ThrombectomySystem sales for the fourth quarter were $15.6 million, compared with$19.7 million one year ago. For the fiscal year ended July 31, 2005,Possis reported sales of $65.1 million, versus $72.4 million in theprior year. Fiscal 2005 U.S. AngioJet System sales were $63.0 million,compared to $70.8 million in 2004.

Net income per diluted share for the 2005 fourth quarter was $0.07versus $0.18 in the prior-year period. For the fiscal year, net incomeper diluted share was $0.34 versus net income of $0.60 per dilutedshare in the prior year. Possis Medical's cash and marketablesecurities position rose to $44.4 million at the end of the fourthquarter. Operating cash flow in the fourth quarter was $2.6 millionand $11.9 million for the 2005 fiscal year. Fiscal 2005 revenue andnet income per diluted share were consistent with previously issuedguidance.

Robert G. Dutcher, Chairman, President and CEO of Possis Medical,said, "Despite a challenging year due to the disappointing AiMI studyresults announced last fall, I am encouraged by the resilience andstrength of our AngioJet franchise, the superiority of our technology,and the progress we made in returning to sequential quarterly growth.In fiscal 2006, we expect to continue to build top-line sales, achievedouble-digit bottom-line growth through the strength of our provenAngioJet System, and introduce new products and new supportingclinical science."

Possis Medical's gross profit margin was 74 percent in the fourthquarter, compared to 76 percent a year ago and 72 percent during thethird quarter of fiscal 2005. The Company continued to expand its baseof U.S. drive units, which now numbers over 1,500 units. Averagecatheter utilization per quarter per installed drive unit, a measureof recurring usage, was 8.2 in the fourth quarter, compared to 10.8 inthe prior-year period and 7.8 in the third quarter of fiscal 2005. Atthe close of fiscal 2005, coronary product sales have stabilizedfollowing two quarters of decline. In addition, peripheral productsales grew 30 percent year over year.

Selling, general, and administrative expenses (SG&A) increased 4percent in the fourth quarter versus the same period a year ago duelargely to Sarbanes-Oxley compliance costs. For the full 2005 fiscalyear, SG&A expenses increased slightly to $28.6 million due to salesforce expansion investments and the Sarbanes-Oxley costs alreadynoted.

Fourth-quarter research and development (R&D) spending increased14 percent to $2.9 million, or 18 percent of sales. The Company'sfiscal 2005 R&D spending increased 16 percent to $10.5 million, or 16percent of sales.

Said Dutcher, "Our aggressive investment in R&D in fiscal 2005 ledto the recent achievement of several milestones that give us reasonfor optimism as we head into fiscal year 2006. Our DVX(TM) andXMI(R)-RX+ catheters are now fully released to the market and areexpected to help drive sales. And, as we announced in July, we havesubmitted a PMA supplement to the U.S. Food and Drug Administration(FDA) seeking approval for our newly developed AngioJet Ultra Consoleand combined disposable Thrombectomy Sets."

Product Development Update

As illustrated by these fourth-quarter product launches andregulatory submissions, Possis expects to continue to benefit from itsongoing investment in new and enhanced product designs. For example,the Ultra Console, when combined with the new integrated disposablepump and catheter sets, is designed to provide plug-and-go conveniencefor hospital staff. The Ultra System greatly reduces the number ofset-up steps, which translates to time savings and enhancedfunctionality, both of which are vital in emergency procedures. TheCompany anticipates receiving FDA approval by the end of fiscal 2006.According to Dutcher, "We are confident that the improved ease-of-useand increased capabilities of the Ultra System will provide a platformfor long-term growth of the AngioJet System business, and also enablefaster introduction of future new and improved catheter models."

In addition, Possis Medical is making significant progress on anew family of rapid exchange catheters called SpiroFlex(TM). TheSpiroFlex design features a stainless steel proximal shaft laser-cutin a spiral configuration, then jacketed with a thin plastic, makingit a highly flexible and kink-resistant catheter with excellentpushability. The SpiroFlex is expected to have its first market usebefore the end of calendar 2005. A higher-power version, designed foruse in larger coronary vessels and saphenous vein bypass grafts, isexpected to come out soon thereafter.

Additionally, during the first quarter of fiscal 2006, Possisplans to complete the process of improving its over-the-wire XMI andXVG(R) catheters by adding a new atraumatic soft tip for enhancedvessel safety, and updating both catheters to include the Company'spatented Tru-Seal(R) hub, which provides a rapid and easy method forloading and unloading catheters during treatment. These advancementswill significantly ease the handling of the XMI and XVG catheters.

Also, Possis Medical is in the final stages of completingdevelopment of its new GuardDOG(R) line of temporary occlusionguidewires (including both 0.014" and 0.035" versions) designed toenhance AngioJet evacuation of thrombus, reduce potential forembolization, and enhance the effectiveness of our Power Pulse(TM)delivery therapy. FDA submissions for these new models are currentlyplanned for the first half of fiscal year 2006.

New Clinical Science

On another important and complementary front, Possis Medical iscontinuing to expand its commitment to sponsor meaningful new clinicalscience to highlight the value of AngioJet treatment for thrombus.

In support of its coronary market, the Company sponsoredpresentations at this year's ACC meeting in Orlando, Florida, by Dr.Charles Simonton of the Sanger Clinic in Charlotte, North Carolina,and Dr. Samin Sharma from Mt. Sinai Medical Center in New York City.These presentations of real-world clinical experience furtherconfirmed that treatment of visible coronary thrombus with AngioJetthrombectomy improves clinical outcomes over conventional percutaneouscoronary intervention without thrombectomy.

Said Dutcher, "The AiMI study focused on expanding our potentialcoronary market to include all heart attack patients, whether or notthey had visible thrombus. Following last year's announcement of theAiMI results, we knew we had to follow up with new clinical science tosupport our coronary market. Thus, we accelerated our collaborationwith key interventional cardiologists to develop and present importantclinical outcomes registries to highlight the value of the AngioJetSystem in treating visible coronary thrombus. The AiMI results arestarkly inconsistent with the large and growing body of clinicalevidence and expert experience seen both before and since the releaseof the AiMI results. Coronary interventionalists know that visiblethrombus remains a serious risk for procedural complications and worseclinical outcomes, and we will continue to support clinical science todemonstrate that AngioJet thrombectomy is preferred treatment for suchpatients."

In addition, Possis is sponsoring the JETSTENT study of AngioJettreatment in heart attack patients with visible thrombus. ThisEuropean-based, multi-centered, randomized trial will be led byprincipal investigator Dr. David Antoniucci of the Careggi Institutein Florence, Italy, with Dr. Antonio Colombo of San Raffaele Hospital,Milan, serving as co-principal investigator. Enrollment of a targeted500 patients is expected to begin later this calendar year.

"The JETSTENT study is a key element of our effort to respond tothe controversial AiMI study results. We fully expect this new studywill confirm Dr. Antoniucci's earlier, published success with AngioJettreatment of heart attack patients with visible thrombus. We are alsoworking with other leading U.S. and European coronaryinterventionalists to develop other clinical evidence to show thevalue of AngioJet treatment in coronary vessels," said Dutcher.

Possis Medical also plans to seek FDA approval later in fiscal2006 to start an IDE clinical study of AngioJet treatment for deepvein thrombosis (DVT). This new clinical science initiative builds onthe Company's current ADVENTT study, and the growing interest amonginterventionalists to use the AngioJet System to treat DVT. Whencompleted, the Company expects the study will result in an approvedindication for use, and establish DVT as the next large marketopportunity for AngioJet treatment.

Concluded Dutcher, "We're confident in our AngioJet technologyplatform, our growth plans and the Company's ability to execute thoseplans, and we're optimistic about maximizing our opportunities infiscal 2006 and beyond."

Outlook

Looking ahead to fiscal 2006, Possis estimates full-year revenuesin the range of $69 to $74 million, with gross margins in the low- tomid-seventies as a percent of sales. Including the impact ofstock-based compensation expense, the Company anticipates net incomeper diluted share of $0.24 to $0.34 for fiscal 2006, up from $0.16 pershare for fiscal 2005. For the fiscal 2006 first quarter, the Companyanticipates revenues of $15.9 to $16.2 million and net income of $0.01to $0.02 per diluted share, including the impact of expensingstock-based compensation. The impact of expensing stock-basedcompensation per FAS No. 123(R) is anticipated to be approximately$0.04 per diluted share for the first quarter and $0.16 per dilutedshare for fiscal year 2006.

Possis Medical will host a conference call on Wednesday, September21, 2005, at 9:30 am Central Time. Mr. Dutcher and Jules L. Fisher,CFO, will discuss the fourth-quarter and full-year operating results,and there will be a time for questions and answers.

To join the conference call, dial 888-889-7567 (international - 1-517-645-6377) by 9:25 am, and give the password "Conference" andleader "Mr. Bob Dutcher."

A webcast of the conference call can be accessed at www.possis.comunder the Investors tab. The webcast can also be accessed atwww.fulldisclosure.com for individual investors. Institutionalinvestors can access the webcast through a password-protected site atwww.streetevents.com. An archived webcast will be available for 30days.

A replay of the conference call will be available from NoonCentral Time on Wednesday, September 21, through Friday, September 23at 11:59 pm Central Time. Dial toll-free 1-866-490-5935 (toll1-203-369-1711).

Possis Medical, Inc. develops, manufactures and markets pioneeringmedical devices for the large and growing cardiovascular and vasculartreatment markets. The AngioJet(R) Rheolytic(TM) Thrombectomy Systemis marketed in the United States for blood clot removal from nativecoronary arteries, leg arteries, coronary bypass grafts and AVdialysis access grafts.

Certain statements in this press release constitute"forward-looking statements" within the meaning of Section 27A of theSecurities Act of 1933, as amended, and Section 21E of the SecuritiesExchange Act of 1934, as amended. Some of these statements relate toestimated future sales, gross margins, expenses and earnings pershare, the impact of the results of the AiMI trial, other marketingand IDE clinical study results, the impact of expensing stock-basedcompensation, and the costs and timing of new products and associatedregulatory clearances. These statements are based on our currentexpectations and assumptions, and entail various risks anduncertainties that could cause actual results to differ materiallyfrom those expressed in such forward-looking statements such asunforeseen delays in new product releases and associated regulatoryclearances and the associated higher expense levels. A discussion ofthese and other factors that could impact the Company's future resultsare set forth in the cautionary statements included in Exhibit 99 tothe Company's Form 10-K for the year ended July 31, 2004, filed withthe Securities and Exchange Commission.

POSSIS MEDICAL, INC. CONSOLIDATED STATEMENTS
OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)


Three Months Ended
-----------------------------
July 31, 2005 July 31, 2004
-------------- -------------
Product sales........................... $16,280,480 $20,039,804

Cost of sales and other expenses:
Cost of medical products........... 4,223,856 4,752,341
Selling, general and administrative 7,498,389 7,230,036
Research and development........... 2,870,227 2,518,552
------------ -------------
Total cost of sales and
other expenses............. 14,592,472 14,500,929
------------ ------------
Operating income........................ 1,688,008 5,538,875
Interest income.................... 360,921 213,139
Loss on sale of securities.............. (13,327) (18,547)
------------ ------------
Income before income taxes.............. 2,035,602 5,733,467
Income tax provision.................... (758,048) (2,145,839)
------------ ------------
Net income.............................. 1,277,554 3,587,628

Other comprehensive loss, net of tax
Unrealized loss on securities........... (108,000) (32,000)
------------ ------------
Comprehensive income.................... $1,169,554 $3,555,628
============ ============
Weighted average number of common.......
shares outstanding:
Basic.......................... 17,303,812 18,191,267
Diluted........................ 17,822,780 19,947,489

Net income per common share:
Basic......................... $0.07 $0.20
===== =====
Diluted....................... $0.07 $0.18
===== =====

Twelve Months Ended
----------------------------
July 31, 2005 July 31, 2004
------------- -------------
Product sales........................... $65,053,329 $72,420,168

Cost of sales and other expenses:
Cost of medical products........... 16,966,874 17,320,094
Selling, general and administrative 28,625,132 27,983,585
Research and development........... 10,501,719 9,033,207
------------ ------------
Total cost of sales and
other expenses............. 56,093,725 54,336,886
------------ ------------
Operating income........................ 8,959,604 18,083,282
Interest income.................... 1,274,149 731,809
Loss on sale of securities.............. (114,401) (52,580)
------------ ------------
Income before income taxes.............. 10,119,352 18,762,511
Income tax provision.................... (3,963,934) (7,033,790)
------------ ------------
Net income.............................. 6,155,418 11,728,721

Other comprehensive income, net of tax
Unrealized loss on securities........... (104,000) (36,000)
------------ ------------
Comprehensive income.................... $6,051,418 $11,692,721
============ ============
Weighted average number of common.......
shares outstanding:
Basic.......................... 17,616,072 17,935,974
Diluted........................ 18,310,906 19,565,530

Net income per common share:
Basic......................... $0.35 $0.65
===== =====
Diluted....................... $0.34 $0.60
===== =====

AngioJet System Key Business Indicators

Q4-04 Q1-05 Q2-05 Q3-05 Q4-05
----------------------------------------------------------------------
U.S. AngioJet Revenue -
$(000) $19,650 $17,199 $15,585 $14,690 $15,609
----------------------------------------------------------------------
U.S. Drive Units Sold 59 49 49 44 40
----------------------------------------------------------------------
U.S. Drive Units in the Field 1,317 1,371 1,422 1,461 1,509
----------------------------------------------------------------------
U.S. Catheter Utilization 10.8 9.3 8.3 7.8 8.2
----------------------------------------------------------------------
Gross Margin % 76% 75% 74% 72% 74%
----------------------------------------------------------------------
EPS Diluted $0.18 $0.11 $0.09 $0.06 $0.07
----------------------------------------------------------------------


POSSIS MEDICAL, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)


July 31, 2005 July 31, 2004
ASSETS ------------- -------------

CURRENT ASSETS:
Cash and cash equivalents.......... $5,257,244 $8,411,784
Marketable securities.............. 39,169,811 39,759,403
Trade receivables (less allowance
for doubtful
accounts and returns of
$669,000 and
$536,000, respectively)....... 8,274,839 10,232,180
Inventories........................ 5,830,204 5,389,653
Prepaid expenses and other assets....... 1,158,214 958,616
Deferred tax asset...................... 1,042,000 890,000
----------- ------------
Total current assets.................... 60,732,312 65,641,636

PROPERTY AND EQUIPMENT, net............. 4,879,221 5,073,775

OTHER ASSETS:
Deferred tax assets................ 12,113,949 15,103,949
Other assets....................... 425,914 201,341
------------ ------------
TOTAL ASSETS............................ $78,151,396 $86,020,701
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade accounts payable............. $1,355,402 $1,791,694
Accrued salaries, wages, and
commissions....................... 3,212,525 4,228,804
Other liabilities.................. 2,468,669 2,222,465
------------ ------------
Total current liabilities.. 7,036,596 8,242,963

OTHER LIABILITIES....................... 526,914 160,536

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Common stock-authorized,
100,000,000 shares
of $0.40 par value each;
issued and outstanding,
17,326,487 and 18,254,942
shares, respectively........ 6,930,595 7,301,977
Additional paid-in capital......... 75,725,188 88,434,540
Unearned compensation.............. (15,000) (15,000)
Accumulated other comprehensive
loss.............................. (240,000) (136,000)
Retained deficit................... (11,812,897) (17,968,315)
------------ ------------
Total shareholders' equity.... 70,587,886 77,617,202
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY................................. $78,151,396 $86,020,701
============ ============