EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--Feb. 8, 2018-- Surmodics, Inc. (Nasdaq: SRDX), a leading provider of medical device and in vitro diagnostic technologies to the healthcare industry, today announced results for its fiscal 2018 first quarter, ended December 31, 2017, and updated financial outlook for fiscal 2018.

“We are making steady progress adding sites and enrolling patients in our pivotal clinical trial for the SurVeil^® drug-coated balloon (DCB), and we are pleased with the recent FDA 510(K) clearance of our .014 microcatheter,” said Gary Maharaj, President and CEO of Surmodics. “We are well positioned to continue executing our strategy to deliver solid revenue and operational results while progressing forward on our growth initiatives.”

First Quarter Fiscal 2018 Financial Results
Total revenue for the first quarter of fiscal 2018 was $17.0 million, as compared with $17.8 million in the prior-year period. Medical Device revenue was $12.8 million in the first quarter of fiscal 2018, as compared with $13.8 million the year-ago period, a decrease of 7.2%. In Vitro Diagnostics revenue was $4.2 million for the first quarter of fiscal 2018 as compared with $4.0 million in the same prior-year quarter, an increase of 5.9%.

Diluted GAAP loss per share in the first quarter of fiscal 2018 was $(0.12) as compared with earnings per share of $0.17 in the year-ago period. On a non-GAAP basis, first quarter earnings per share were $0.10 in 2018 versus $0.19 last year. As a result of the Tax Cuts and Jobs Act of 2017, fiscal 2018 first quarter net loss included a one-time tax expense of $1.2 million, or $0.09 per share, from the Company’s net deferred tax asset revaluation based on the newly enacted U.S. federal tax rate of 21%, as compared with the previous rate of 35%. Additionally, the decrease in earnings in the current quarter period reflects previously announced increased investments in research, development and other operating expenses to support the Company’s whole-product solutions strategy, including the SurVeil DCB and other proprietary products, anticipated lower hydrophilic royalty revenue as well as increased contingent consideration expense.

As of December 31, 2017, cash and investments were $46.7 million. Surmodics generated cash from operating activities of $0.6 million in the first quarter of fiscal 2018. Capital expenditures totaled $1.3 million for the first quarter of fiscal 2018.

Fiscal 2018 Outlook
Surmodics continues to expect fiscal year 2018 revenue to range from $72.0 million to $75.0 million. The Company expects diluted loss in the range of ($0.45) to ($0.70) per share as compared with the prior guidance of ($0.50) to ($0.75) per share. Non-GAAP diluted (loss) earnings per share guidance range is now ($0.20) to $0.05 as compared with the prior guidance of ($0.16) to ($0.41) per share.

Conference Call
Surmodics will host a webcast at 7:30 a.m. CT (8:30 a.m. ET) today to discuss first quarter results. To access the webcast, go to the investor relations portion of the Company’s website at www.surmodics.com and click on the webcast icon. A replay of the first quarter conference call will be available by dialing 888-203-1112 and entering conference call ID passcode 8043861. The audio replay will be available beginning at 10:30 a.m. CT on Thursday, February 8, 2018, until 10:30 a.m. CT on Thursday, February 15, 2018.

About Surmodics, Inc.
Surmodics is the global leader in surface modification technologies for intravascular medical devices and a leading provider of chemical components for in vitro diagnostic (IVD) immunoassay tests and microarrays. Surmodics is pursuing highly differentiated whole-product solutions that are designed to address unmet clinical needs for its medical device customers and engineered to the most demanding requirements. This key growth strategy leverages the combination of the Company’s expertise in proprietary surface technologies, along with enhanced device design, development and manufacturing capabilities. The Company mission remains to improve the detection and treatment of disease. Surmodics is headquartered in Eden Prairie, Minnesota. For more information, visit www.surmodics.com. The content of Surmodics’ website is not part of this press release or part of any filings that the company makes with the SEC.

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 and earnings expectations for fiscal 2018, and our SurVeil DCB and other proprietary products, including the timing, impact and success of the TRANSCEND clinical trial, 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 DCB, and other proprietary products; (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, acquire, and integrate target companies, and 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 September 30, 2017, and updated in our subsequent reports filed with the SEC. These reports are available in the Investors section of our website at www.surmodics.com and at the SEC website at www.sec.gov. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.

Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Surmodics is reporting non-GAAP financial results including non-GAAP operating income, non-GAAP income before income taxes, non-GAAP net income, EBITDA and non-GAAP diluted net (loss) income per share, and the non-GAAP effective tax rate. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financial statements, provide meaningful insight into our operating performance excluding certain event-specific matters, and provide an alternative perspective of our results of operations. We use non-GAAP measures, including those set forth in this release, to assess our operating performance and to determine payout under our executive compensation programs. We believe that presentation of certain non-GAAP measures allows investors to review our results of operations from the same perspective as management and our board of directors and facilitates comparisons of our current results of operations. The method we use to produce non-GAAP results is not in accordance with GAAP and may differ from the methods used by other companies. Non-GAAP results should not be regarded as a substitute for corresponding GAAP measures but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures do have limitations in that they do not reflect certain items that may have a material impact on our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with both our financial statements prepared in accordance with GAAP and the reconciliation of the supplemental non-GAAP financial measures to the comparable GAAP results provided for the specific periods presented, which are attached to this release.

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Source: Surmodics, Inc.

Surmodics, Inc.
Andy LaFrence, 952-500-7000
ir@surmodics.com