Surmodics Reports First Quarter Fiscal 2016 Results
-
GAAP Revenue of
$16.5 Million , up 16% -
GAAP EPS of
$0.19 , Non-GAAP EPS of$0.38 - Fiscal 2016 Guidance Reaffirmed
“The Surmodics team had an exceptional first quarter of fiscal 2016,”
said
First Quarter Revenue and Earnings Summary
GAAP revenue for the fiscal 2016 first quarter totaled
Diluted GAAP earnings per share from continuing operations in the first
quarter of fiscal 2016 were
Medical Device Segment
This business, which includes hydrophilic coatings, device drug delivery
technologies, and balloon catheter products, posted revenue of
In Vitro Diagnostics Segment
Revenue for the first quarter of fiscal 2016 totaled
Balance Sheet and Cash Flow
As of
Fiscal 2016 Outlook
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About Surmodics SurVeil™ Drug-Coated Balloon
The SurVeil drug-coated balloon incorporates Surmodics’ decades
of experience as a leading supplier of surface modification technologies
to the medical device industry. It includes a
About
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements. Statements that
are not historical or current facts, including statements about beliefs
and expectations regarding the Company’s performance in the near- and
long-term, including our revenue, earnings and cash flow expectations
for fiscal 2016, our fiscal 2016 priorities, and our SurVeil drug-coated
balloon, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties, and important factors could
cause actual results to differ materially from those anticipated,
including (1) our ability to successfully develop, obtain regulatory
approval for, and commercialize our SurVeil drug-coated balloon
product, including the timing associated with the initiation of our
first-in-human clinical trial; (2) our reliance on third parties
(including our customers and licensees) and their failure to
successfully develop, obtain regulatory approval for, market and sell
products incorporating our technologies; (3) our ability to successfully
identify and acquire target companies or achieve expected benefits from
acquisitions that are consummated; (4) possible adverse market
conditions and possible adverse impacts on our cash flows, and (5) the
factors identified under “Risk Factors” in Part I, Item 1A of our Annual
Report on Form 10-K for the fiscal year ended
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally
accepted accounting principles, or GAAP,
Surmodics, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Income | ||||||||
(in thousands, except per share data) |
||||||||
Three Months Ended |
||||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Revenue | ||||||||
Royalties and license fees | $ | 7,954 | $ | 7,275 | ||||
Product sales | 7,181 | 5,847 | ||||||
Research and development | 1,406 | 1,083 | ||||||
Total revenue | 16,541 | 14,205 | ||||||
Operating expenses | ||||||||
Product costs | 2,366 | 1,902 | ||||||
Research and development | 3,634 | 3,576 | ||||||
Selling, general and administrative | 3,608 | 3,542 | ||||||
Amortization, special and other charges | 2,994 | 151 | ||||||
Total operating costs and expenses | 12,602 | 9,171 | ||||||
Operating income | 3,939 | 5,034 | ||||||
Other (loss) income, net | (134 | ) | 50 | |||||
Income before income taxes | 3,805 | 5,084 | ||||||
Income tax provision | (1,292 | ) | (1,470 | ) | ||||
Net income | $ | 2,513 | $ | 3,614 | ||||
Basic net income per share | $ | 0.19 | $ | 0.27 | ||||
Diluted net income per share | $ | 0.19 | $ | 0.27 | ||||
Weighted average shares outstanding | ||||||||
Basic | 12,966 | 13,225 | ||||||
Diluted | 13,186 | 13,423 |
Surmodics, Inc. and Subsidiaries | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands) |
||||||
December 31, |
September 30, |
|||||
(Unaudited) | ||||||
Assets | ||||||
Cash and short-term investments | $ | 42,668 | $ | 55,588 | ||
Restricted cash | 786 | ― | ||||
Accounts receivable | 5,522 | 7,478 | ||||
Inventories | 3,301 | 2,979 | ||||
Other current assets | 961 | 1,744 | ||||
Total current assets | 53,238 | 67,789 | ||||
Property and equipment, net | 13,506 | 12,968 | ||||
Intangible assets, net | 16,502 | 2,760 | ||||
Goodwill | 21,822 | 8,010 | ||||
Other assets | 7,147 | 7,183 | ||||
Total assets | $ | 112,215 | $ | 98,710 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities | $ | 5,608 | $ | 4,700 | ||
Total current liabilities | 5,608 | 4,700 | ||||
Contingent consideration | 9,308 | ― | ||||
Other liabilities | 2,026 | 2,137 | ||||
Total stockholders’ equity | 95,273 | 91,873 | ||||
Total liabilities and stockholders’ equity | $ | 112,215 | $ | 98,710 |
Surmodics, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(in thousands) |
||||||||
Three Months Ended |
||||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Operating Activities: | ||||||||
Net income | $ | 2,513 | $ | 3,614 | ||||
Depreciation and amortization | 909 | 683 | ||||||
Stock-based compensation | 684 | 525 | ||||||
Contingent consideration accretion and foreign currency transaction loss expenses |
244 | ― | ||||||
Deferred taxes | 741 | 1,025 | ||||||
Net other operating activities | (143 | ) | (492 | ) | ||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | 2,194 | 309 | ||||||
Accounts payable and accrued liabilities | (1,248 | ) | (508 | ) | ||||
Income taxes | 508 | 413 | ||||||
Net change in other operating assets and liabilities | (274 | ) | (39 | ) | ||||
Net cash provided by operating activities from continuing operations |
6,128 | 5,530 | ||||||
Investing Activities: | ||||||||
Payments for acquisitions, net of cash acquired | (18,156 | ) | ― | |||||
Net purchases of property and equipment | (384 | ) | (41 | ) | ||||
Cash transferred to discontinued operations | ― | (45 | ) | |||||
Net other investing activities | ― | (2,238 | ) | |||||
Net cash used in investing activities from continuing operations | (18,540 | ) | (2,324 | ) | ||||
Financing Activities: | ||||||||
Purchase of common stock to fund employee taxes | (353 | ) | (725 | ) | ||||
Repurchase of common stock | ― | (20,000 | ) | |||||
Net other financing activities | (155 | ) | 568 | |||||
Net cash used in financing activities from continuing operations | (508 | ) | (20,157 | ) | ||||
Net cash used in continuing operations | (12,920 | ) | (16,951 | ) | ||||
Discontinued operations: | ||||||||
Net cash used in operating activities | ― | (45 | ) | |||||
Net cash provided by financing activities | ― | 45 | ||||||
Net cash provided by discontinued operations | ― | ― | ||||||
Net change in cash and cash equivalents | (12,920 | ) | (16,951 | ) | ||||
Cash and Cash Equivalents: | ||||||||
Beginning of period | 55,588 | 43,511 | ||||||
End of period | $ | 42,668 | $ | 26,560 |
Surmodics, Inc. and Subsidiaries | |||||||||||||||
Supplemental Segment Information | |||||||||||||||
(in thousands) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended December 31, | |||||||||||||||
2015 | 2014 | % Change | |||||||||||||
Revenue | % of Total | % of Total | |||||||||||||
Medical Device | $ | 12,247 | 74.0 | % | $ | 10,635 | 74.9 | % | 15.2 | % | |||||
In Vitro Diagnostics | 4,294 | 26.0 | 3,570 | 25.1 | 20.3 | ||||||||||
Total revenue | $ | 16,541 | 100.0 | % | $ | 14,205 | 100.0 | % | 16.4 | % |
Three Months Ended December 31, | ||||||||
2015 | 2014 | |||||||
Operating Income | ||||||||
Medical Device | $ | 3,830 | $ | 5,515 | ||||
In Vitro Diagnostics | 1,643 | 1,098 | ||||||
Corporate | (1,534 | ) | (1,579 | ) | ||||
Total operating income | $ | 3,939 | $ | 5,034 |
Surmodics, Inc., and Subsidiaries | ||||||||||||||||||||
Net Income and Diluted EPS GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||
For the Three Months Ended December 31, 2015 | ||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
Total |
Operating |
Operating |
Income |
Net |
Diluted |
|||||||||||||||
GAAP | $ | 16,541 | $ | 3,939 | 23.8 | % | $ | 3,805 | $ | 2,513 | $ | 0.19 | ||||||||
Adjustments: | ||||||||||||||||||||
Acquisition transaction, integration and other costs (1) | ― | 2,531 | 15.3 | 2,531 | 2,225 | 0.17 | ||||||||||||||
Contingent consideration accretion expense (2) | ― | 109 | 0.7 | 109 | 109 | 0.01 | ||||||||||||||
Research and development tax credit (3) | ― | ― | ― | ― | 135 | (0.02 | ) | |||||||||||||
Foreign exchange loss (4) | ― | ― | ― | 135 | (222 | ) | 0.01 | |||||||||||||
Amortization of intangible assets (5) | ― | 354 | 2.1 | 354 | 298 | 0.02 | ||||||||||||||
Non-GAAP | $ | 16,541 | $ | 6,933 | 41.9 | % | $ | 6,934 | $ | 5,058 | $ | 0.38 |
(1) | Represents acquisition related costs, including due diligence and integration expenses. Due diligence and other fees include legal, tax, investment banker and other expenses associated with acquisitions that can be highly variable and not representative of on-going operations. | |
(2) | The contingent consideration accretion adjustment represents accounting adjustments to state contingent consideration liabilities at their estimated fair value. | |
(3) | Represents the estimated discrete income tax benefit associated with the December 2015 signing of the Protecting Americans from Tax Hikes Act of 2015— which retroactively reinstated federal R&D income tax credits for calendar 2015. | |
(4) | Foreign exchange loss related to marking contingent consideration to market. | |
(5) | To exclude amortization of acquisition related intangible assets and associated tax impact. |
Surmodics, Inc., and Subsidiaries | ||||||||||||||||||||
Net Income and Diluted EPS GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||
For the Three Months Ended December 31, 2014 | ||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
Total |
Operating |
Operating |
Income |
Net |
Diluted |
|||||||||||||||
GAAP | $ | 14,205 | $ | 5,034 | 35.4 | % | $ | 5,084 | $ | 3,614 | $ | 0.27 | ||||||||
Adjustments: | ||||||||||||||||||||
Research and development tax credit (1) | ― | ― | ― | ― | (201 | ) | (0.02 | ) | ||||||||||||
Amortization of intangible assets (2) | ― | 151 | 1.1 | 151 | 96 | 0.01 | ||||||||||||||
Non-GAAP | $ | 14,205 | $ | 5,185 | 36.5 | % | $ | 5,235 | $ | 3,509 | $ | 0.26 |
(1) | Represents a discrete income tax benefit associated with the December 2014 signing of the Tax Increase Prevention Act of 2014 which retroactively reinstated federal R&D income tax credits for calendar 2014. | |
(2) | To exclude amortization of acquisition related intangible assets and associated tax impact. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160128005345/en/
Source:
Surmodics, Inc.
Andy LaFrence, 952-500-7000
Vice President of
Finance and Chief Financial Officer