Surmodics Reports Third Quarter Fiscal 2022 Results
Surmodics, Inc. (Nasdaq: SRDX) reported fiscal 2022 third-quarter revenues of $24.9 million, marking a 4% year-over-year increase. The company experienced a GAAP loss per share of $(0.41) and a non-GAAP loss per share of $(0.34). Medical Device revenue rose to $17.5 million, a 5% increase, while In Vitro Diagnostics revenue reached $7.3 million, up 3%. Surmodics revised its revenue guidance for fiscal 2022 to $97 million to $99 million, reflecting soft customer demand, while EPS guidance improved to $(1.50) to $(1.35) due to strong year-to-date results.
- Fourth consecutive quarter of double-digit product sales growth year-over-year.
- Medical Device revenue increased by 5% year-over-year to $17.5 million.
- In Vitro Diagnostics revenue grew by 3% year-over-year to $7.3 million.
- Revised EPS guidance improved from a loss of $(1.70) to $(1.35).
- GAAP loss per share increased to $(0.41) from $(0.24) year-over-year.
- Reduced revenue guidance for fiscal 2022 from $98 million to $101 million down to $97 million to $99 million.
Summary of Third Quarter and Recent Highlights
-
Revenue of
, an increase of$24.9 million 4% year-over-year -
GAAP EPS of
, non-GAAP EPS of$(0.41) $(0.34) - Fourth consecutive quarter of double‐digit product sales growth year‐over‐year
“We delivered solid financial results that were in line with our expectations, while continuing to make meaningful investments in our growth initiatives,” said
Third Quarter Fiscal 2022 Financial Results
Total revenue for the third quarter of fiscal 2022 was
Diluted GAAP loss per share in the third quarter of fiscal 2022 was
As of
Updated Fiscal 2022 Guidance
Conference Call Today at
About
Safe Harbor for Forward-looking Statements
This press release, and disclosures related to it, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements regarding our fiscal 2022 strategic objectives and our ability to deliver on our fiscal 2022 financial and strategic objectives; our revenue and loss expectations for fiscal 2022 and beyond, including our fiscal 2022 financial guidance and the amount of fiscal 2022 license fee revenue associated with the
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
Condensed Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) |
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Three Months Ended |
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Nine Months Ended |
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|
|
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
$ |
13,919 |
|
|
$ |
12,084 |
|
|
$ |
40,227 |
|
|
$ |
33,969 |
|
Royalties and license fees |
|
8,795 |
|
|
|
8,796 |
|
|
|
26,738 |
|
|
|
38,182 |
|
Research, development and other |
|
2,140 |
|
|
|
2,993 |
|
|
|
6,998 |
|
|
|
9,014 |
|
Total revenue |
|
24,854 |
|
|
|
23,873 |
|
|
|
73,963 |
|
|
|
81,165 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs |
|
5,141 |
|
|
|
5,105 |
|
|
|
14,745 |
|
|
|
13,018 |
|
Research and development |
|
12,975 |
|
|
|
12,246 |
|
|
|
38,350 |
|
|
|
36,003 |
|
Selling, general and administrative |
|
12,857 |
|
|
|
7,885 |
|
|
|
33,168 |
|
|
|
22,815 |
|
Acquired intangible asset amortization |
|
1,024 |
|
|
|
560 |
|
|
|
3,184 |
|
|
|
1,676 |
|
Acquisition transaction, integration and other costs |
|
— |
|
|
|
461 |
|
|
|
— |
|
|
|
461 |
|
Total operating costs and expenses |
|
31,997 |
|
|
|
26,257 |
|
|
|
89,447 |
|
|
|
73,973 |
|
Operating (loss) income |
|
(7,143 |
) |
|
|
(2,384 |
) |
|
|
(15,484 |
) |
|
|
7,192 |
|
Other expense |
|
(38 |
) |
|
|
(127 |
) |
|
|
(217 |
) |
|
|
(284 |
) |
(Loss) income before income taxes |
|
(7,181 |
) |
|
|
(2,511 |
) |
|
|
(15,701 |
) |
|
|
6,908 |
|
Income tax benefit (provision) |
|
1,530 |
|
|
|
(776 |
) |
|
|
3,155 |
|
|
|
(2,382 |
) |
Net (loss) income |
$ |
(5,651 |
) |
|
$ |
(3,287 |
) |
|
$ |
(12,546 |
) |
|
$ |
4,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income per share |
$ |
(0.41 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.90 |
) |
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net (loss) income per share |
$ |
(0.41 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.90 |
) |
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
13,929 |
|
|
|
13,837 |
|
|
|
13,907 |
|
|
|
13,740 |
|
Diluted |
|
13,929 |
|
|
|
13,837 |
|
|
|
13,907 |
|
|
|
13,959 |
|
Condensed Consolidated Balance Sheets (in thousands) |
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||
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|
2022 |
|
|
2021 |
|
||
Assets |
|
(Unaudited) |
|
|
(See note) |
|
||
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
20,074 |
|
|
$ |
31,153 |
|
Available-for-sale securities |
|
|
2,012 |
|
|
|
7,717 |
|
Accounts receivable, net |
|
|
9,382 |
|
|
|
9,169 |
|
Contract assets — royalties and license fees |
|
|
7,584 |
|
|
|
7,091 |
|
Inventories, net |
|
|
10,926 |
|
|
|
6,760 |
|
Prepaids and other |
|
|
10,057 |
|
|
|
8,365 |
|
Total Current Assets |
|
|
60,035 |
|
|
|
70,255 |
|
Property and equipment, net |
|
|
28,289 |
|
|
|
30,090 |
|
Available-for-sale securities |
|
|
— |
|
|
|
2,002 |
|
Deferred tax assets |
|
|
8,479 |
|
|
|
5,867 |
|
Intangible assets, net |
|
|
30,752 |
|
|
|
37,054 |
|
|
|
|
42,590 |
|
|
|
45,606 |
|
Other assets |
|
|
5,507 |
|
|
|
3,718 |
|
Total Assets |
|
$ |
175,652 |
|
|
$ |
194,592 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
10,000 |
|
|
|
10,000 |
|
Deferred revenue |
|
|
4,007 |
|
|
|
4,647 |
|
Other current liabilities |
|
|
15,380 |
|
|
|
15,168 |
|
Total Current Liabilities |
|
|
29,387 |
|
|
|
29,815 |
|
Deferred revenue |
|
|
7,402 |
|
|
|
10,301 |
|
Other long-term liabilities |
|
|
13,751 |
|
|
|
14,391 |
|
Total Liabilities |
|
|
50,540 |
|
|
|
54,507 |
|
Total Stockholders’ Equity |
|
|
125,112 |
|
|
|
140,085 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
175,652 |
|
|
$ |
194,592 |
|
|
|
|
|
|
|
|
|
|
Note: Derived from audited financial statements as of the date indicated. |
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Supplemental Segment Information (in thousands) (Unaudited) |
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Three Months Ended |
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|
|
2022 |
|
2021 |
|
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|
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Revenue: |
|
|
|
|
|
% of Total |
|
|
|
|
|
% of Total |
|
% Change |
|
||||
Medical Device |
|
$ |
17,528 |
|
|
|
|
$ |
16,755 |
|
|
|
|
|
|
||||
In |
|
|
7,326 |
|
|
|
|
|
7,118 |
|
|
|
|
|
|
||||
Total revenue |
|
$ |
24,854 |
|
|
|
|
|
|
$ |
23,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|||||||||||||
|
|
2022 |
|
2021 |
|
|
|
||||||||||||
Revenue: |
|
|
|
|
|
% of Total |
|
|
|
|
|
% of Total |
|
% Change |
|
||||
Medical Device |
|
$ |
52,889 |
|
|
|
|
$ |
60,858 |
|
|
|
|
(13.1)% |
|
||||
In |
|
|
21,074 |
|
|
|
|
|
20,307 |
|
|
|
|
|
|
||||
Total revenue |
|
$ |
73,963 |
|
|
|
|
|
|
$ |
81,165 |
|
|
|
|
|
|
(8.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
||||||||
Operating (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Device |
|
$ |
(7,308 |
) |
|
$ |
(2,491 |
) |
|
$ |
(16,712 |
) |
|
$ |
5,480 |
|
|
|
|
In |
|
|
3,387 |
|
|
|
3,378 |
|
|
|
10,262 |
|
|
|
10,407 |
|
|
|
|
Total segment operating (loss) income |
|
|
(3,921 |
) |
|
|
887 |
|
|
|
(6,450 |
) |
|
|
15,887 |
|
|
|
|
Corporate |
|
|
(3,222 |
) |
|
|
(3,271 |
) |
|
|
(9,034 |
) |
|
|
(8,695 |
) |
|
|
|
Total operating (loss) income |
|
$ |
(7,143 |
) |
|
$ |
(2,384 |
) |
|
$ |
(15,484 |
) |
|
$ |
7,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Measures to Non-GAAP Amounts Schedule of EBITDA, Adjusted EBITDA and Cash Flows from Operations (in thousands) (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(5,651 |
) |
|
$ |
(3,287 |
) |
|
$ |
(12,546 |
) |
|
$ |
4,526 |
|
Income tax (benefit) provision |
|
(1,530 |
) |
|
|
776 |
|
|
|
(3,155 |
) |
|
|
2,382 |
|
Depreciation and amortization |
|
2,206 |
|
|
|
1,844 |
|
|
|
6,902 |
|
|
|
5,610 |
|
Investment income, net |
|
(22 |
) |
|
|
(26 |
) |
|
|
(73 |
) |
|
|
(95 |
) |
Interest expense |
|
145 |
|
|
|
59 |
|
|
|
410 |
|
|
|
178 |
|
EBITDA |
|
(4,852 |
) |
|
|
(634 |
) |
|
|
(8,462 |
) |
|
|
12,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition transaction, integration and other costs (1) |
|
— |
|
|
|
461 |
|
|
|
— |
|
|
|
461 |
|
Adjusted EBITDA |
$ |
(4,852 |
) |
|
$ |
(173 |
) |
|
$ |
(8,462 |
) |
|
$ |
13,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
$ |
(3,497 |
) |
|
$ |
2,755 |
|
|
$ |
(14,723 |
) |
|
$ |
14,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Reconciliation: Estimated Non-GAAP Diluted Earnings Per Share
For the Fiscal Year Ending (Unaudited) |
|||||||
|
Fiscal 2022 Full-Year Estimate |
||||||
|
Low |
|
High |
||||
GAAP diluted EPS |
$ |
(1.50 |
) |
|
$ |
(1.35 |
) |
Amortization of acquired intangibles per diluted share (2) |
|
0.27 |
|
|
|
0.27 |
|
Non-GAAP diluted EPS |
$ |
(1.23 |
) |
|
$ |
(1.08 |
) |
Net (Loss) Income and Diluted EPS GAAP to Non-GAAP Reconciliation (in thousands, except per share data) (Unaudited) |
||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
|
|
For the Three Months Ended |
||||||||||||||||||||||||||
|
|
Total Revenue |
|
Operating Loss |
|
Operating Loss Percentage |
|
Loss Before Income Taxes |
|
Net Loss (3) |
|
Diluted EPS (4) |
|
Effective Tax Rate |
||||||||||||||
GAAP |
|
$ |
24,854 |
|
|
$ |
(7,143 |
) |
|
|
(28.7 |
)% |
|
$ |
(7,181 |
) |
|
$ |
(5,651 |
) |
|
$ |
(0.41 |
) |
|
|
21.3 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets (2) |
|
|
— |
|
|
|
1,024 |
|
|
|
4.1 |
% |
|
|
1,024 |
|
|
|
930 |
|
|
|
0.07 |
|
|
|
|
|
Non-GAAP |
|
$ |
24,854 |
|
|
$ |
(6,119 |
) |
|
|
(24.6 |
)% |
|
$ |
(6,157 |
) |
|
$ |
(4,721 |
) |
|
$ |
(0.34 |
) |
|
|
23.3 |
% |
|
|
For the Three Months Ended |
|
|||||||||||||||||||||||||
|
|
Total Revenue |
|
Operating Loss |
|
Operating Loss Percentage |
|
Loss Before Income Taxes |
|
Net Loss (3) |
|
Diluted EPS (4) |
|
Effective Tax Rate |
||||||||||||||
GAAP |
|
$ |
23,873 |
|
|
$ |
(2,384 |
) |
|
|
(10.0 |
)% |
|
$ |
(2,511 |
) |
|
$ |
(3,287 |
) |
|
$ |
(0.24 |
) |
|
|
(30.9 |
)% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets (2) |
|
|
— |
|
|
|
560 |
|
|
|
2.4 |
% |
|
|
560 |
|
|
|
530 |
|
|
|
0.04 |
|
|
|
|
|
Acquisition transaction, integration and other costs (1) |
|
|
— |
|
|
|
461 |
|
|
|
1.9 |
% |
|
|
461 |
|
|
|
461 |
|
|
|
0.03 |
|
|
|
|
|
Non-GAAP |
|
$ |
23,873 |
|
|
$ |
(1,363 |
) |
|
|
(5.7 |
)% |
|
$ |
(1,490 |
) |
|
$ |
(2,296 |
) |
|
$ |
(0.17 |
) |
|
|
(54.1 |
)% |
Net (Loss) Income and Diluted EPS GAAP to Non-GAAP Reconciliation (Continued) (in thousands, except per share data) (Unaudited) |
||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
|
|
For the Nine Months Ended |
||||||||||||||||||||||||||
|
|
Total Revenue |
|
Operating Loss |
|
Operating Loss Percentage |
|
Loss Before Income Taxes |
|
Net Loss (3) |
|
Diluted EPS (4) |
|
Effective Tax Rate |
||||||||||||||
GAAP |
|
$ |
73,963 |
|
|
$ |
(15,484 |
) |
|
|
(20.9 |
)% |
|
$ |
(15,701 |
) |
|
$ |
(12,546 |
) |
|
$ |
(0.90 |
) |
|
|
20.1 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets (2) |
|
|
— |
|
|
|
3,184 |
|
|
|
4.3 |
% |
|
|
3,184 |
|
|
|
2,893 |
|
|
|
0.21 |
|
|
|
|
|
Non-GAAP |
|
$ |
73,963 |
|
|
$ |
(12,300 |
) |
|
|
(16.6 |
)% |
|
$ |
(12,517 |
) |
|
$ |
(9,653 |
) |
|
$ |
(0.69 |
) |
|
|
22.9 |
% |
|
|
For the Nine Months Ended |
||||||||||||||||||||||||||
|
|
Total Revenue |
|
Operating Income |
|
Operating Income Percentage |
|
Income Before Income Taxes |
|
Net Income (3) |
|
Diluted EPS |
|
Effective Tax Rate |
||||||||||||||
GAAP |
|
$ |
81,165 |
|
|
$ |
7,192 |
|
|
|
8.9 |
% |
|
$ |
6,908 |
|
|
$ |
4,526 |
|
|
$ |
0.32 |
|
|
|
34.5 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets (2) |
|
|
— |
|
|
|
1,676 |
|
|
|
2.1 |
% |
|
|
1,676 |
|
|
|
1,586 |
|
|
|
0.12 |
|
|
|
|
|
Acquisition transaction, integration and other costs (1) |
|
|
— |
|
|
|
461 |
|
|
|
0.5 |
% |
|
|
461 |
|
|
|
461 |
|
|
|
0.03 |
|
|
|
|
|
Non-GAAP |
|
$ |
81,165 |
|
|
$ |
9,329 |
|
|
|
11.5 |
% |
|
$ |
9,045 |
|
|
$ |
6,573 |
|
|
$ |
0.47 |
|
|
|
27.3 |
% |
(1) |
Represents expenses specifically associated with the business acquisition of |
|
(2) |
Amortization of business acquisition-related intangible assets and associated tax impact. A significant portion of the business acquisition-related amortization is not tax deductible. |
|
(3) |
Net (loss) income includes the effect of the above adjustments on the income tax benefit (provision), taking into account deferred taxes and non-deductible items. Income tax impacts were estimated using the applicable statutory rate ( |
|
(4) |
Potentially dilutive common shares resulting from dilutive common stock options and non-vested stock relating to restricted stock awards and restricted stock units have been excluded from the calculation of EPS as their effect was antidilutive for the three months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220727005130/en/
ir@surmodics.com
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