Cardiovascular Systems, Inc.

NASDAQ: CSII
San Francisco Investor Meetings
January 11, 2017

Safe Harbor
FORWARD-LOOKING STATEMENTS
Certain statements made in this presentation are
forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995
and are provided under the protection of the safe
harbor for forward-looking statements provided by
that Act. In some cases, you can identify forwardlooking statements by terms such as may, will,
should, could, would, expect, plans,
anticipates, believes, estimates, projects,
predicts, potential and similar expressions
intended to identify forward-looking
statements. Examples of these statements include,
but are not limited to, statements regarding
Cardiovascular System, Inc.s (CSI or the
Company) future financial performance, product
sales distribution, industry and market expectations
and estimates, the benefits and uses of the
Companys products, market opportunity potential,
clinical trials, international expansion, regulatory
approvals, future profitability, debt capacity, use of
proceeds, results of operations, prospects, plans and

objectives of management, and other statements

that are other than statements of historical fact.
These statements involve risks and uncertainties
which could cause results to differ materially from
those projected, including those described under the
heading Risk Factors contained in the prospectus
filed with the Securities and Exchange Commission
(the SEC) for our recent public offering, and as
detailed from time to time in CSIs SEC reports,
including its Reports on Form 10-K and Form 10-Q.
As a result of these matters, changes in facts,
assumptions not being realized or other
circumstances, CSI's actual results may differ
materially from the expected results discussed in the
forward-looking statements presented. The forwardlooking statements are made only as of the date of
this presentation, and CSI undertakes no obligation
to update them to reflect subsequent events or
circumstances.

Investment Merits
Orbital atherectomy addresses calcified arterial plaque
- a large, unmet medical need
Three attractive markets:
Peripheral - below the knee
Peripheral - above the knee
Coronary

Medical evidence and stable reimbursement support

growth
Early stage of adoption; large, clinically trained sales force
Positioned for sustainable, profitable revenue growth

Benefits of Orbital Atherectomy

Heart-to-heels solution
Effective in calcium
Excellent safety
Alternate access sites
Long-term durability
Economical

Heart

Above the Knee

Below the Knee

With systems for coronary or peripheral indications, the CSI product line offers heart-to-heels capability.

CSI Orbital Atherectomy Systems (OAS)

Differential Sanding:
Eccentrically mounted crown bidirectionally sands hard plaque
Healthy, elastic tissue flexes away
from crown to minimize vessel
damage

Centrifugal Force:
Increasing speed = increased orbit
radius
360 crown contact designed to
create a smooth, concentric lumen
Allows constant blood flow and
particulate flushing during orbit
Treat large vessels through small
sheaths, multiple vessels with one
crown
Crowns shown are not to scale and for illustrative purposes only.

Peripheral Application: Before & After

Before

Anterior tibial
90% occluded

After

< 5% residual
Smooth, tubular
lumen

Plaque safely
removed, blood
flow restored
with durable
results
Case courtesy of Dr. Jihad Mustapha, Metro Health (Results may vary)

Unique Mechanism of Action

Bi-directional and differential sanding

93% < red blood cell size

99% < lumen size of capillaries

Calculation of mean particulate size is based particles larger than 1 micron from a
representative study using carbon blocks and cadaver model systems.

Peripheral Artery Disease (PAD)

Large and underserved patient population
Up to 18 Million in U.S. with PAD,
4 Million with Critical Limb Ischemia
(CLI)

Only 2.6 Million

Receiving Treatment

700,000
CLI

2.6 Million
Treated

1.9 Million
Claudicant

750,000
Below The Knee
(BTK)
Treatments

1.8 Million
Above The Knee
(ATK)
Treatments

Sources: Sage Group, Millennium Research Group US Markets for Peripheral Intervention Devices 2014, iData US Market for Peripheral
Vascular Devices and Accessories 2014, and Go, et al Heart Disease and Stroke Statistics -- 2014 Update, Circulation.

BTK Calcium $1B Opportunity

750,000 Below The Knee
(BTK) Treatments

60,000
Medical
120,000
Interventions Management

170,000
Interventions

130,000
Amputations

*CSI estimates

300,000* Patients with

Calcified Lesions BTK

450,000
Medical
Management

120,000
Amputations

ATK Calcium $1B Opportunity

1.8 Million Above the Knee
(ATK) Treatments

300,000
Interventions
30,000
Amputations
1.5M
Medical
Management

280,000* Patients with

Calcified Lesions ATK

150,000
Interventions

100,000
Medical
Management

30,000
Amputations

*CSI estimates

10

Calcified Coronary Lesions

Prone to dissection during
balloon angioplasty or predilatation1

Difficult to completely dilate2

May prevent adequate stent
expansion3
Prevent stent delivery to the
desired location4
Uneven drug distribution
associated with restenosis5
1 Fitzgerald PJ, et al.. Circulation. 1992:86;64-70. Kahn J, et al. Cathet Cardiovasc Diagn. 1990;21:89-91.
2 Cavusoglu E, et al. Cathet Cardivasc Intervent. 2004;62:485-498.
3 Moussa I, et al. Circulation. 1997;96(1):128-136.
4 Gilutz H, et al. Cathet Cardiovasc Intervent. 2000;50:212-214.
5 Nakano M, et al. Eur Heart J. 2013;34:3304-3313.

J Invasive Cardiol. 2000; 12(11)

11

CAD Severe Calcium $700M Opportunity

1.25 Million Coronary Artery Disease (CAD)
CABG, 250M
Procedures
and Estimated CHIP Patients

250,000
CABG

120,000
CHIP Patients

178,000* Patients with

Severely Calcified Lesions

30,000
CABG

880,000
PCI

48,000
CHIP Patients

100,000
PCI

CHIP: Complex Higher-Risk Indicated Patients

* 12% severe calcium in both PCIs & CABG + 48,000 estimated CHIP patients
Bourantas,C et al; Heart, 2014;0:17. 20% severe Ca++ in DES trials
Gnreux, P. et al. J Am Coll Cardiol 2014;63(18):1845-54. 6% severe Ca++ in ACS
Feldman D. et al, Circulation. 2013;127:2295-2306. 60% of PCIs ACS, 40% stable 12% severe Ca++

12

Leadership in Clinical Evidence

5000+

7000

600

Patients

Lesions

Physicians

Trial

PAD

LIBERTY 360
(Enrollment Complete)

Size
n=1,204

Importance
All-comers trial vs. any other treatment
Nearly 700 Rutherford class 4, 5, or 6

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

OPTIMIZE
(Enrolling)

n=50

OAS + DCB vs. DCB alone

Calcified below-the-knee lesions

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

OASIS, CONFIRM series,

CALCIUM 360 and
COMPLIANCE 360

CAD

ECLIPSE
(Enrollment Begins 2017)

n=3,359

High rates of procedural success and durability

Low adverse events/bail-out stenting

n=2,000

Largest randomized trial to study coronary

atherectomy for calcified coronary lesions
OAS + DES vs. angioplasty + DES

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ORBIT II
(3-year Data)

n=443

92% freedom from revascularization at 3-years

Up to $4,946 per patient cost savings at 2-years

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

COAST

(Enrollment Complete)

n=100

Supports 2nd Gen OAS in U.S. and Japan approval

Shonin application submitted in June 2016

13

LIBERTY 360 Study Design/30-Day Results

Study Design

Diamondback OAS was the

most frequently used
atherectomy device across
all Rutherford Classes
Physicians reported high
satisfaction regarding
device selection and
patient outcome
Favorable freedom from
Major Adverse Events
(MAE) and Target Vessel
Revascularization (TVR)
78% of Rutherford Class 6
patients released to home

30-Day Results
Rutherford
Class

Freedom from MAE

at 30 Days

Freedom from
TVR at 30 Days

2-3

99.0%

99.4%

4-5

95.7%

96.9%

90.7%

97.9%

Adams, LIBERTY Late Breaking Clinical Trial, AMP Conference, Aug 11, 2016.

14

ECLIPSE Trial Design

Evaluation of Treatment Strategies for Severe CaLcifIc Coronary Arteries:
Orbital Atherectomy vs. Conventional Angioplasty Prior to Implantation of Drug Eluting StEnts

2000 pts with severely calcified lesions; 60 US sites

Orbital Atherectomy Strategy

Randomize
1:1

Conventional Angioplasty Strategy

(1.25 mm Crown followed by noncompliant balloon optimization)

(conventional and/or specialty

balloons per operator discretion)

2nd generation DES implantation

and optimization

2nd generation DES implantation

and optimization

Primary endpoints: 1) Post-PCI minimal stent area assessed by OCT (N400 in imaging study)
2) 1-year TVF (all patients)

Principal investigators: Philippe Gnreux, Ajay Kirtane; Study chairman: Gregg W. Stone
Sponsor: Cardiovascular Systems Inc.

15

Consistent, Attractive Reimbursement

Hospital

Procedure

2017 Reimbursement

% Change
from 2016

Inpatient

PAD

$10,593-$19,754

4%-3%

Inpatient

CAD

$10,072-$19,396

1%-1%

Outpatient

PAD/CAD

$9,727-$14,511

2%-(1%)

Non-Hospital
Facility

Procedure

2017 Reimbursement

% Change
from 2016

Outpatient

PAD (ATK)

$10,957-$14,853

(2%)-(2%)

Outpatient

PAD (BTK)

$10,804-$13,371

(2%)-(2%)

MS-DRG 246, 247, 248, 249, 250, 251, 252, 253, 254; CPT Codes 37225, 37227, 37229,
37231, 92933; C-APCs 5191,5192,5193,5194; HCPCS Code C9602

16

Track Record of Revenue Growth

FY16 Slowed by Sales Force Transition
Return to Growth in FY17
$200

$ Millions

$150

$100

+14%

$50

$0
FY12

FY13

FY14

FY15

Amounts exclude revenue from distribution agreement terminated on June 30, 2015

FY16

Q1 FY17

17

Strong, Improving Gross Margins

85%

80.1%

80%

76.7%

76.5%

FY12

FY13

77.3%

81.0%

78.2%

75%

70%
FY14

FY15

FY16

Q1 FY17

18

Solid Cash Position/No Debt

Cash Adequate to Reach Positive Cash Flow and Profitability

$100

Decreasing cash burn from cost reductions/increasing revenues

Positive cash flow in Q1 FY17 excluding $3M DOJ payment
$10M upfront payment received for Japan Distribution Rights (Nov. 2016)
Additional cushion potential from facility financing/debt capacity

$84

$ Millions

$80
$65
$60

$68
$61

$58

Q4 FY16

Q1 FY17

$40
$20

$0
Q4 FY15

Q2 FY16

*Includes $10M upfront payment for Japan distribution rights

Q1 FY17
Pro-forma*

19

Achieved Positive Adjusted EBITDA

$ millions
Revenue

Adjusted EBITDA
$2.6

$48.5

$49.8

$44.5

-$1.4

$41.4
-$6.4

-$11.1
Q2 '16

Q3 '16

Q4 '16

Q1 '17

Q2 '16

Q3 '16 *

Q4 '16

Q1 '17

Reconciliations of Adjusted EBITDA to the most comparable U.S. GAAP measure for the respective periods can be found in the appendix

* Excludes $12.2 million of litigation and severance costs.

20

Why CSI?
Orbital atherectomy addresses calcified arterial plaque
- a large, unmet medical need
Three attractive markets:
Peripheral - below the knee
Peripheral - above the knee
Coronary

Medical evidence and stable reimbursement support

growth
Early stage of adoption; large, clinically trained sales force
Positioned for sustainable, profitable revenue growth

21

Appendix

22

Adjusted EBITDA Reconciliation

Three Months Ended
Dec. 31,
2015

Mar. 31, 2016

June 30, 2016

$(15,163)

$(22,716)

$(4,884)

$ (1,856)

Less: Other (Income) Expense, net

(3)

(33)

(111)

(33)

Less: Provision for income taxes

23

23

23

24

(15,143)

(22,726)

(4,972)

(1,867)

3,112

3,173

2,585

3,450

981

979

1,017

1,017

(11,050)

(18,574)

(1,370)

2,600

12,218

$(11,050)

$(6,356)

$(1,370)

$2,600

Net Loss

Loss from Operations

Add: Stock-based compensation
Add: Depreciation and amortization
Adjusted EBITDA
Add: One-time costs (net of stock-based compensation) *
Adjusted EBITDA (net of one-time costs)

Sept. 30, 2016

* One-time costs include: Department of Justice settlement, restructuring charges from a workforce reduction, and CEO retirement benefits.
Non-GAAP Financial Measures
To supplement CSI's consolidated condensed financial statements prepared in accordance with GAAP, CSI uses a non-GAAP financial measure referred to as "Adjusted
EBITDA" in this presentation. Reconciliations of Adjusted EBITDA to the most comparable U.S. GAAP measure for the respective periods can be found in the appendix. In
addition, an explanation of the manner in which CSI's management uses Adjusted EBITDA to conduct and evaluate its business, the economic substance behind
management's decision to use Adjusted EBITDA, the substantive reasons why management believes that Adjusted EBITDA provides useful information to investors, the
material limitations associated with the use of Adjusted EBITDA and the manner in which management compensates for those limitations can be found in CSIs most
recent quarterly earnings release, dated, Oct. 26, 2016.

23

Pro-Forma Cash Reconciliation

$ in millions
Cash and cash equivalents as of Sept. 30, 2016

Add: Upfront payment received from Medikit for exclusive

distribution rights in Japan (November 2016)
Q1 FY17 Pro-forma cash position *

$58
10
$68

24

Q1 FY 2017 Statement of Operations

Consolidated Statements of Operations
(Dollars in thousands, except per share and share amounts)
(Unaudited)
Three Months Ended
September 30,
2016
2015

Net revenues
Cost of goods sold

49,800 $
9,466

43,871
8,771

40,334

35,100

36,866

41,395

5,335

6,941

42,201

48,336

Loss from operations

Other (income) and expense, net

(1,867)
(33)

(13,236)
2

Loss before income taxes

Provision for income taxes

(1,834)
24

(13,238)
23

(1,858) $

(13,261)

(0.06) $

(0.41)

Gross profit
Expenses:
Selling, general and administrative
Research and development
Total expenses

Net loss
Net loss per common share:
Basic and diluted
Weighted average common shares used in computation:
Basic and diluted

32,985,081

32,210,874

25

Q1 FY 2017 Balance Sheet

Consolidated Balance Sheets
(Dollars in thousands, except per share and share amounts)
(Unaudited)
September 30,
2016

June 30,
2016

ASSETS
Current assets
Cash and cash equivalents

58,194

60,638

Accounts receivable, net

24,308

23,128

Inventories

16,887

17,440

Marketable securities
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Patents, net
Other assets

705

684

1,998

2,992

102,092
31,820

104,882
32,471

4,352

5,013

70

Total assets

40

138,334

8,763

142,406

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities
Accounts payable

Accrued expenses
Total current liabilities
Long-term liabilities
Other liabilities
Total liabilities
Commitments and contingencies
Common stock, $0.001 par value; authorized 100,000,000 common shares at September
30, 2016 and June 30, 2016; issued and outstanding 33,046,180 at September 30, 2016
and 32,792,497 at June 30, 2016, respectively
Additional paid in capital
Accumulated other comprehensive income

30,451

35,499

4,939

6,010

35,390

41,509

33

33

432,119

428,235
40

(329,269)

Total stockholders equity

Total liabilities and stockholders equity

26,993

61

Accumulated deficit

(327,411)

102,944
$

8,506

21,688

138,334

100,897
$

142,406

26

Q1 FY 2017 Statement of Cash Flows

Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Three Months Ended
September 30,
2016
2015

Cash flows from operating activities

Net loss

(1,858) $

(13,261)

Adjustments to reconcile net loss to net cash used in operations

Depreciation of property and equipment

957

Amortization and write-off of patents

807

86

Provision for doubtful accounts

150

175

3,450

4,107

Stock-based compensation

887

Changes in assets and liabilities

Accounts receivable

(1,330)

Inventories
Prepaid expenses and other assets

(1,480)

1,314

Accounts payable

1,043

257

Accrued expenses and other liabilities

Net cash used in operating activities
Cash flows from investing activities
Purchases of property and equipment

(166)

(2,076)

(4,836)

(282)

(1,847)

Purchases of marketable securities

Costs incurred in connection with patents

Net cash used in investing activities
Cash flows from financing activities
Exercise of stock options

(18)

(6,376)

Issuance of convertible note receivable

(350)
(17)

(170)

(160)

(452)

(2,374)

84

Net cash provided by financing activities

19

84

Net change in cash and cash equivalents

Cash and cash equivalents
Beginning of period
End of period

3,791

553

19

(2,444)

(7,191)

60,638
$

58,194

83,842
$

76,651

27

DIAMONDBACK 360 Coronary Orbital Atherectomy System

Diamondback 360 and Stealth 360Peripheral Atherectomy Systems

Indications: The DIAMONDBACK 360 Coronary Orbital Atherectomy System

(OAS) is a percutaneous orbital atherectomy system indicated to facilitate
stent delivery in patients with coronary artery disease (CAD) who are
acceptable candidates for PTCA or stenting due to de novo, severely calcified
coronary artery lesions.

The Diamondback 360 and Stealth 360 PAD Systems are

percutaneous orbital atherectomy systems indicated for use as therapy
in patients with occlusive atherosclerotic disease in peripheral arteries
and stenotic material from artificial arteriovenous dialysis fistulae. The
Systems are
contraindicated for use in coronary arteries, bypass grafts, stents, or
where thrombus or dissections are present. Although the incidence of
adverse events is rare, potential events that can occur with
atherectomy include: pain, hypotension, CVA/TIA, death, dissection,
perforation, distal embolization, thrombus formation, hematuria,
abrupt or acute vessel closure, or arterial spasm. For further
information call CSI at 1-877-274-0901 and/or consult CSIs website at
www.csi360.com.

Contraindications: The OAS is contraindicated when the VIPERWIRE guide

wire cannot pass across the coronary lesion or the target lesion is within a
bypass graft or stent. The OAS is contraindicated when the patient is not an
appropriate candidate for bypass surgery, angioplasty, or atherectomy
therapy, or has angiographic evidence of thrombus, or has only one open
vessel, or has angiographic evidence of significant dissection at the
treatment site and for women who are pregnant or children.
Warnings/Precautions:; Performing treatment in excessively tortuous vessels
or bifurcations may result in vessel damage; The OAS was only evaluated in
severely calcified lesions, A temporary pacing lead may be necessary when
treating lesions in the right coronary and circumflex arteries; On-site surgical
back-up should be included as a clinical consideration; Use in patients with
an ejection fraction (EF) of less than 25% has not been evaluated. See the
instructions for use before performing DIAMONDBACK 360 coronary orbital
atherectomy procedures for detailed information regarding the procedure,
indications, contraindications, warnings, precautions, and potential adverse
events. For further information call CSI at 1-877-274-0901 and/or consult
CSIs website at www.csi360.com.

Caution: Federal law (USA) restricts this device to sale by or on the

order of a physician.

Caution: Federal law (USA) restricts this device to sale by or on the order of a
physician.

28

Investor Contact:
Jack Nielsen
651-202-4919
j.nielsen@csi360.com

2016 Cardiovascular Systems, Inc.

All Rights Reserved
Diamondback 360 and CSI are registered trademarks
of Cardiovascular Systems, Inc.
www.csi360.com

NASDAQ: CSII