EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--Aug 6, 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 third quarter ended June 30, 2018, and updated its financial outlook for fiscal 2018.
Summary of Third Quarter Fiscal 2018 and Recent HighlightsRevenue of $22.2 million, up 24.9% Raising revenue guidance range to $79.0 to $81.0 million GAAP EPS of ($0.20), Non-GAAP EPS of $0.27 Acquisition of thrombectomy platform strengthens product pipeline
“We are pleased to report strong operating performance and meaningful advances on our strategic objectives during the quarter,” said Gary Maharaj, President and CEO of Surmodics. “We are on track to complete enrollment in our TRANSCEND U.S. pivotal clinical trial in fiscal 2019. The acquisition of Embolitech’s promising thrombectomy technology platform leverages our unique capabilities and advances our focus on developing highly differentiated products.”
Third Quarter Fiscal 2018 Financial Results
Total revenue for the third quarter of fiscal 2018 was $22.2 million, as compared with $17.8 million in the prior-year period. Medical Device revenue was $16.7 million in the third quarter of fiscal 2018, as compared with $12.8 million in the year-ago period, an increase of 30.7%, and includes $1.7 million from our SurVeil ® agreement with Abbott. In Vitro Diagnostics revenue was $5.5 million for the third quarter of fiscal 2018 as compared with $5.0 million in the same prior-year quarter, an increase of 10.3%.
Diluted GAAP loss per share in the third quarter of fiscal 2018 was $(0.20) as compared with diluted GAAP earnings per share of $0.05 in the year-ago period. On a non-GAAP basis, earnings per share were $0.27 in the third quarter of fiscal 2018, as compared with $0.09 in the year-ago period. GAAP results were negatively affected by the current-quarter acquisition of in-process research and development assets from Embolitech, which resulted in a $0.47 charge in the period, after tax.
As of June 30, 2018, cash and investments were $62.4 million. Surmodics generated cash from operating activities of $29.2 million in the first nine months of fiscal 2018. Capital expenditures totaled $6.9 million for the first nine months of fiscal 2018.
Fiscal 2018 Guidance Revised
As a result of revenue performance in the first nine months of fiscal 2018 and to reflect the Embolitech technology acquisition, Surmodics is raising its fiscal 2018 revenue and non-GAAP earnings guidance, while narrowing its diluted GAAP earnings guidance. Surmodics expects fiscal year 2018 revenue to range from $79.0 million to $81.0 million, up from previous expectations in the range of $75.0 million to $79.0 million. The Company expects diluted loss in the range of ($0.25) to ($0.30) per share as compared with the prior guidance of ($0.20) to ($0.35) per share. Non-GAAP diluted earnings guidance now ranges from $0.39 to $0.44 per share as compared with prior guidance of ($0.06) to $0.09 per share.
Surmodics will host a webcast at 7:30 a.m. CT (8:30 a.m. ET) today to discuss third quarter results. To access the webcast, go to the investor relations portion of the Company’s website at https://surmodics.gcs-web.com and click on the webcast icon. The webcast will be archived on the Company’s website for 90 days. A replay of the third quarter conference call will be available by dialing 888-203-1112 and entering conference call ID passcode 8313933. The audio replay will be available beginning at 10:30 a.m. CT on Monday, August 6, 2018, until 10:30 a.m. CT on Monday, August 13, 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 (including realization of the full potential benefits of our agreement with Abbott), 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) possible adverse market conditions and possible adverse impacts on our cash flows, and (4) 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 https://surmodics.gcs-web.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 EBITDA and Adjusted EBITDA, non-GAAP operating income, non-GAAP income before income taxes, non-GAAP net income, and non-GAAP diluted earnings per share, and the non-GAAP effective income 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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