Surmodics Reports Fourth Quarter Fiscal 2017 Results and Provides Fiscal 2018 Guidance
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 2017 fourth quarter, ended September
30, 2017 and financial outlook for fiscal 2018.
Recent Highlights
-
First Patient Enrolled in TRANSCEND Pivotal Clinical Trial for SurVeil®
Drug-Coated Balloon - Global Approvals of .014" Low-Profile PTA Balloon Dilation Catheter
- Q4 2017 Revenue of $20.1 Million, up 10.5%
- EPS of $0.03, Non-GAAP EPS of $0.18
"We are pleased with the execution of our whole-product solutions
strategy with the recently announced first patient enrolled in
TRANSCEND, the pivotal clinical trial for the SurVeil®
drug-coated balloon (DCB), and global approvals of our .014" Low-Profile
PTA Balloon Dilation Catheter," said Gary Maharaj, President & CEO of
Surmodics. "We have made meaningful advancements on several key
development and clinical initiatives through our fiscal 2017 and look
forward to expanding on those achievements in fiscal 2018. Further, our
fourth fiscal quarter was marked by strong revenue growth and
operational execution across our business."
Fourth Quarter Fiscal 2017 Financial Results
Total revenue
for the fourth quarter of fiscal 2017 was $20.1 million, as compared
with $18.2 million in the prior-year period.
Medical Device revenue was $14.7 million in the fourth quarter of fiscal
2017, as compared with $13.7 million the year-ago period, an increase of
7.5%. In Vitro Diagnostics revenue was $5.3 million for the fourth
quarter of fiscal 2017 as compared with $4.5 million in the same
prior-year quarter, an increase of 19.8%.
Diluted GAAP earnings per share in the fourth quarter of fiscal 2017
were $0.03 as compared with $0.20 in the year-ago period. On a non-GAAP
basis, earnings per share were $0.18 in the fourth quarter of fiscal
2017 versus $0.26 last year. The decrease in earnings per share 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 as well as lower hydrophilic royalty
revenue, partially offset by a $1.1 million license fee earned in the
fourth quarter of fiscal 2017.
As of September 30, 2017, cash and investments were $48.3 million.
Surmodics generated cash from operating activities of $14.1 million in
fiscal 2017. Capital expenditures totaled $6.4 million for fiscal 2017.
Fiscal 2018 Outlook
Surmodics expects fiscal year 2018
revenue to range from $72.0 million to $75.0 million. The Company
expects diluted loss in the range of $0.50 to $0.75 per share, which
reflects the Company's commitment to accelerate execution of its
whole-product solutions strategy with increased research and development
investments. Non-GAAP diluted loss is expected to be in the range 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 fourth 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 fourth quarter conference
call will be available by dialing 888-203-1112 and entering conference
call ID passcode 1387738. The audio replay will be available beginning
at 10:30 a.m. CT on Wednesday, November 8, 2017, until 10:30 a.m. CT on
Wednesday, November 15, 2017.
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)
tests and microarrays. Following two recent acquisitions of Creagh
Medical and NorMedix, the Company is executing a key growth strategy for
its medical device business by expanding to offer total intravascular
product solutions to its medical device customers. The combination of
proprietary surface technologies, along with enhanced device design,
development and manufacturing capabilities, enables Surmodics to
significantly increase the value it offers with highly differentiated
intravascular solutions designed and engineered to meet the most
demanding requirements. With this focus on offering total solutions,
Surmodics' mission remains to improve the detection and treatment of
disease. Surmodics is headquartered in Eden Prairie, Minnesota. For more
information about the company, 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, 2016, 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 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.
|
Surmodics, Inc. and Subsidiaries |
||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 8,826 | $ | 8,133 | $ | 32,790 | $ | 30,999 | ||||||||
| Royalties and license fees | 9,223 | 7,996 | 31,787 | 33,203 | ||||||||||||
| Research, development and other | 2,009 | 2,025 | 8,535 | 7,164 | ||||||||||||
| Total revenue | 20,058 | 18,154 | 73,112 | 71,366 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Product costs | 3,317 | 2,839 | 11,422 | 10,908 | ||||||||||||
| Research and development | 9,713 | 5,303 | 31,817 | 18,498 |
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