Atrion Reports First Quarter 2024 Results
Atrion (NASDAQ: ATRI) reported first quarter 2024 results with revenues of $47.3 million, operating income of $3.1 million, and net income of $2.8 million. Diluted earnings per share were $1.59. Despite revenue growth and increased operating income, net income decreased due to a one-time inventory write-off. Gross margins declined primarily due to delayed orders, excess inventory, and product mix. The company remains debt free with total cash and investments of $18.7 million.
- None.
One-time inventory write-off impacting operating income and net income.
Decrease in gross margins due to delayed orders, excess inventory, and product mix.
20% decline in net income for the quarter.
Insights
The gross margin contraction from 37.7% to 31.0% (adjusted) signals cost pressures or changes in sales mix, potentially affecting profitability. For investors, the promise to resume normal production in Q3 may serve as a potential inflection point for improved margins, yet the reliance on a few customers to right-size inventories introduces risk if their forecasts are off.
From a balance sheet perspective, the debt-free status and extdollar18.7 million in cash and investments provide financial stability. However, the 20% decline in net income and weaker investment portfolio performance could be stress points. Investors should weigh these aspects carefully against the company's longer-term prospects and market positioning.
Atrion’s mention of normalized orders resuming in the second half of the year suggests a potential rebound in sales but also adds an element of uncertainty, contingent on customer actions. This information can be helpful for investors trying to gauge the company's near-term revenue prospects. The management’s strategy to mitigate the under absorption of overhead by reducing inventory could also signal enhanced operational efficiency going forward.
Lastly, the success of the MPS 3 consoles indicates a strategic pivot toward recurring revenue models via disposables, which could offer a stable and growing income stream. Investors interested in long-term value would find this aspect particularly noteworthy.
ALLEN, Texas, May 10, 2024 (GLOBE NEWSWIRE) -- Atrion Corporation (NASDAQ: ATRI) today announced its results for the first quarter ended March 31, 2024.
Revenues for the first quarter of 2024 totaled
Commenting on the results for the first quarter of 2024 compared to the prior year period, David Battat, President and CEO, stated, “Revenues grew
Mr. Battat added, “Gross margins for the quarter were
Mr. Battat concluded, “Weaker performance in our investment portfolio in the current-year quarter also contributed to the
Atrion Corporation develops and manufactures products primarily for medical applications. The Company’s website is www.atrioncorp.com.
Statements in this press release that are forward looking are based upon current expectations and actual results or future events may differ materially. Such statements include, but are not limited to, Atrion's expectations regarding no further out-of-the ordinary write-offs or normal course-of-business write-offs of the size recognized in the first quarter of 2024, reduction of inventory in the second quarter of 2024, resumption of normal production levels in the third quarter of 2024 and improved margins, Words such as "expects," "believes," "anticipates," "forecasts," "intends," "should", "plans," "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements contained herein involve numerous risks and uncertainties, and there are a number of factors that could cause actual results or future events to differ materially, including, but not limited to, the following: the risk that COVID-19 leads to further material delays and cancellations of, or reduced demand for, procedures in which our products are utilized; curtailed or delayed capital spending by hospitals and other healthcare providers; disruption to our supply chain; closures of our facilities; delays in training; delays in gathering clinical evidence; diversion of management and other resources to respond to COVID-19; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that COVID-19 further disrupts local economies and causes economies in our key markets to enter prolonged recessions; changing economic, market and business conditions; acts of war or terrorism; the effects of governmental regulation; the impact of competition and new technologies; slower-than-anticipated introduction of new products or implementation of marketing strategies; implementation of new manufacturing processes or implementation of new information systems; our ability to protect our intellectual property; changes in the prices of raw materials; changes in product mix; intellectual property and product liability claims and product recalls; the ability to attract and retain qualified personnel; and the loss of, or any material reduction in sales to, any significant customers. In addition, assumptions relating to budgeting, marketing, product development and other management decisions are subjective in many respects and thus susceptible to interpretations and periodic review which may cause us to alter our marketing, capital expenditures or other budgets, which in turn may affect our results of operations and financial condition. The foregoing list of factors is not exclusive, and other factors are set forth in the Company's filings with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date hereof, and we do not undertake any obligation, and disclaim any duty, to supplement, update or revise such statements, whether as a result of subsequent events, changed expectations or otherwise, except as required by applicable law.
| Contact: | Cindy Ferguson Vice President and Chief Financial Officer (972) 390-9800 |
| ATRION CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | 47,334 | $ | 39,993 | ||||
| Cost of goods sold | 34,983 | 24,912 | ||||||
| Gross profit | 12,351 | 15,081 | ||||||
| Operating expenses | 9,209 | 10,611 | ||||||
| Operating income | 3,142 | 4,470 | ||||||
| Interest and dividend income | 156 | 240 | ||||||
| Other investment income (loss) | (109 | ) | (721 | ) | ||||
| Other income | 14 | 10 | ||||||
| Income before income taxes | 3,203 | 3,999 | ||||||
| Income tax provision | (411 | ) | (514 | ) | ||||
| Net income | $ | 2,792 | $ | 3,485 | ||||
| Income per basic share | $ | 1.59 | $ | 1.98 | ||||
| Weighted average basic shares outstanding | 1,760 | 1,762 | ||||||
| Income per diluted share | $ | 1.59 | $ | 1.98 | ||||
| Weighted average diluted shares outstanding | 1,761 | 1,763 | ||||||
| ATRION CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) | ||||||
| March 31, | December 31, | |||||
| ASSETS | 2024 | 2023 | ||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 7,135 | $ | 3,565 | ||
| Short-term investments | 2,760 | 2,691 | ||||
| Total cash and short-term investments | 9,895 | 6,256 | ||||
| Accounts receivable | 25,116 | 23,029 | ||||
| Inventories | 75,000 | 82,307 | ||||
| Prepaid expenses and other | 2,503 | 3,173 | ||||
| Total current assets | 112,514 | 114,765 | ||||
Long-term investments | 8,853 | 8,165 | ||||
Property, plant and equipment, net | 124,608 | 125,347 | ||||
| Other assets | 12,652 | 12,548 | ||||
| $ | 258,627 | $ | 260,825 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities | 12,252 | 12,621 | ||||
| Other non-current liabilities | 4,452 | 5,315 | ||||
| Stockholders’ equity | 241,923 | 242,889 | ||||
| $ | 258,627 | $ | 260,825 | |||
| ATRION CORPORATION NON-GAAP FINANCIAL INFORMATION (In thousands) |
This release includes references to non-GAAP gross margin and operating income excluding a one-time inventory write-off. These financial measures are not prepared in accordance with GAAP. The gross profit excluding inventory write-off and operating income excluding inventory write-off are calculated by adding the one-time inventory write-off to our most directly comparable GAAP measure cost of goods sold.
We believe that these non-GAAP measures provide insight into our operating income performance. However, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures used by other companies. These non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP financial measures. and are supplemental to the comparable GAAP measures.
Reconciliation to the most directly comparable GAAP measures is provided in the table below.
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | Change | |||||||||
| Revenues | $ | 47,334 | $ | 39,993 | |||||||
| Cost of goods sold | 34,983 | 24,912 | |||||||||
| Gross profit | 12,351 | 15,081 | |||||||||
| Add: inventory write-off | 2,306 | - | |||||||||
| Gross profit excluding inventory write-off | 14,657 | 15,081 | |||||||||
| Gross margin excluding inventory write-off | |||||||||||
| Operating income | 3,142 | 4,470 | |||||||||
| Add: inventory write-off | 2,306 | - | |||||||||
| Operating income excluding inventory write-off | 5,448 | 4,470 | |||||||||
FAQ
What were Atrion 's first quarter 2024 revenues?
Atrion reported revenues of $47.3 million for the first quarter of 2024.
What caused the decline in operating income for Atrion in the first quarter of 2024?
The decline in operating income was primarily due to a one-time inventory write-off.
What was Atrion 's net income for the first quarter of 2024?
Atrion reported a net income of $2.8 million for the first quarter of 2024.
What was the diluted earnings per share for Atrion in the first quarter of 2024?
Atrion reported diluted earnings per share of $1.59 for the first quarter of 2024.
What is the total cash and investments of Atrion as of March 31, 2024?
As of March 31, 2024, Atrion had total cash and investments of $18.7 million.
