It is estimated that peripheral vascular disease affects more than 20 million people worldwide, including twelve million people in the United States and seven million people in Europe.

Clinical studies have identified several factors that increase the risk of peripheral vascular disease, including smoking, diabetes, obesity, high blood pressure, lack of exercise, coronary artery disease, high cholesterol and being over the age of 65. Demographic trends suggest an increase in the prevalence of peripheral vascular disease over time, driven primarily by rising levels of obesity and diabetes and an aging population.

The growing prevalence of diabetes, among other factors, has also led to an increase in the number of people suffering from end stage renal disease. Patients with end stage renal disease require a regular regimen of dialysis, an intravenous therapy that removes toxins and excess fluids from the bloodstream. Dialysis frequently requires the patient to undergo vascular procedures to create and preserve vessel access sites.

It is estimated that the worldwide market for peripheral vascular devices exceeds $3 billion. Vascular surgeons are increasingly adopting new endovascular techniques. According to the Healthcare Cost and Utilization Project, of the 1.1 million surgical procedures for peripheral vascular disease performed in the United States in 2003, over 38% were endovascular procedures, as compared to 25% in 1997.

The Company’s endovascular products are used by vascular surgeons and interventionalists in minimally invasive endovascular procedures, such as angioplasty, stenting, stent-grafting and atherectomy. The EndoFit Aortic Stent Graft is a line of endovascular grafts used to treat aortic aneurysms, a weakening and ballooning of the aorta. The EndoFit Thoracic Stent Graft is used to treat the thoracic aorta and the EndoFit Aorto-Uni-Iliac (AUI) Stent Graft is used to treat the abdominal aorta. VascuTape Radiopaque Tape is a flexible, medical-grade tape with centimeter or millimeter markings printed in the Company’s proprietary radiopaque ink that is visible both to the eye and to an x-ray machine or fluoroscope. The Company’s dialysis access product is used in surgical procedures that facilitate the creation of dialysis access sites, typically in a patient’s arm. The AnastoClip Vessel Closure System is a titanium clip implanted by vascular surgeons to attach vessels, native and prosthetic, to each other.

The Company’s vascular products are used primarily in open vascular surgery for the treatment of peripheral vascular disease. The Expandable Valvulotome cuts valves in the saphenous vein, a vein that runs from the ankle to the groin, so that it can function as a bypass vessel to carry blood past diseased arteries to the lower leg or the foot. The Pruitt-Inahara Carotid Shunt is used to temporarily divert, or shunt, blood to the brain while the surgeon removes plaque from the carotid artery in a carotid endarterectomy surgery. The InvisiGrip Vein Stripper is a single-incision, inversion vein stripper, which is designed to provide a less traumatic alternative to standard vein strippers for the removal of the saphenous vein. The Company manufactures single lumen latex and latex-free embolectomy catheters as well as dual lumen embolectomy catheters.

Gross profit increased 14.2% to $18.7 million for the nine months ended September 30, 2006 from $16.3 million for the nine months ended September 30, 2005

Sales and marketing expense increased 27.8% to $10.6 million for the nine months ended September 30, 2006 from $8.3 million for the nine months ended September 30, 2005.

Research and development expense increased 5.3% to $2.6 million for the nine months ended September 30, 2006 from $2.5 million for the nine months ended September 30, 2005.

Restructuring expenses decreased to approximately $0.2 million for the nine months ended September 30, 2006 from approximately $1.0 million for the nine months ended September 30, 2005.