SRDX - Surmodics Reports Fourth Quarter Fiscal 2020 Results
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 2020 fourth quarter ended September 30, 2020.
Summary of Fourth Quarter and Recent Highlights
- Revenue of $22.5 million, a decrease of 27% year-over-year
- GAAP EPS of ($0.22), non-GAAP EPS of ($0.18)
- FDA clearance received for Pounce TM Thrombus Retrieval System for non-surgical removal of clots from the peripheral arterial vasculature
“I am proud of the meaningful progress our team made in fiscal 2020 to advance our strategic objectives in spite of this year’s unprecedented challenges,” said Gary Maharaj, President and CEO of Surmodics, Inc. “Our team capped the year by achieving another milestone with the receipt of the 510(k) clearance for our Pounce TM Thrombus Retrieval System. As we look ahead to fiscal 2021, we remain confident in our long-term outlook and the ability to accomplish our strategic initiatives to deliver durable growth.”
Fourth Quarter Fiscal 2020 Financial Results
Total revenue for the fourth quarter of fiscal 2020 was $22.5 million, compared to $30.8 million in the prior-year period. Medical Device revenue was $17.2 million in the fourth quarter of fiscal 2020, compared to $24.8 million in the year-ago period, a decrease of 31%. Revenue in the fourth quarter includes $1.6 million from our Development and Distribution Agreement with Abbott Vascular, Inc. (“Abbott”) for the SurVeil DCB TM drug coated balloon (DCB), compared to $7.6 million in the prior-year quarter, which included the impact of the achievement of a milestone. In Vitro Diagnostics revenue was $5.4 million for the fourth quarter of fiscal 2020, compared to $6.0 million in the same prior-year quarter, a decrease of 10%.
GAAP loss per share in the fourth quarter of fiscal 2020 was ($0.22), compared to earnings per share of $0.26 in the year-ago period. On a non-GAAP basis, loss per share in the fourth quarter of fiscal 2020 was ($0.18), compared to earnings per share of $0.37 in the same prior-year quarter.
As of September 30, 2020, Surmodics reported cash and short-term investments totaling $61.1 million and no debt. Surmodics generated $1.3 million of cash from operating activities in the fourth quarter of fiscal 2020. Capital expenditures totaled $1.0 million for the fourth quarter of fiscal 2020.
Fiscal 2021 Guidance
Due to the continued uncertainty surrounding the duration and magnitude of the COVID-19 pandemic, the Company will not provide financial guidance at this time.
Conference Call Today at 4 p.m. CT (5 p.m. ET)
Surmodics will host a webcast at 4 p.m. CT (5 p.m. ET) today to discuss fourth 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 fourth quarter conference call will be available by dialing 888-203-1112 and entering conference call ID passcode 4873909. The audio replay will be available beginning at 7 p.m. CT on Wednesday, November 4, 2020, until 7 p.m. CT on Wednesday, November 11, 2020.
About Surmodics, Inc.
Surmodics is a leading provider of surface modification technologies for intravascular medical devices and chemical components for in vitro diagnostic immunoassay tests and microarrays. Surmodics is pursuing development and commercialization of highly differentiated medical devices that are designed to address unmet clinical needs 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 Securities and Exchange Commission (“SEC”).
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 the Company’s ability to execute on its strategy, its potential to achieve consistent double-digit revenue growth in fiscal 2022 and beyond, initiatives to deliver durable growth, emerging FDA requirements for premarket approvals of new vascular devices that use Paclitaxel, expectations regarding conduct and timing of clinical studies, expectation regarding the presentations of clinical information regarding our products, target dates and the potential for delay related to regulatory clearances, target dates for regulatory filing, plans for product releases and clinical evaluations, potential future revenue amounts under our Distribution and Development Agreement with Abbott Vascular, expectations regarding the impact of patent expirations on future revenues, expectation regarding future operating expenses, and expectation regarding the Company’s positioning for long-term growth, shareholder value creation, and the adequacy of cash and investments to provide capacity to support the Company’s strategic growth initiatives, 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, without limitation: (1) our ability to successfully develop and commercialize our SurVeil TM DCB (including realization of the full potential benefits of our agreement with Abbott), Avess TM DCB, Sundance TM 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) possible adverse market conditions and possible adverse impacts on our cash flows; (4) the impacts, duration, and severity of the global COVID-19 pandemic and the effects of responses to it on healthcare systems, the general economy, our business partners, and our operations; 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, 2019, 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 (loss) income, non-GAAP operating (loss) income percentage, non-GAAP (loss) income before income taxes, non-GAAP net (loss) income, and non-GAAP diluted (loss) 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 payouts 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.
CONTACT:
Surmodics, Inc.
Tim Arens, 952-500-7000
ir@surmodics.com
| Surmodics, Inc. and Subsidiaries |
| Condensed Consolidated Statements of Operations |
| (in thousands, except per share data) |
| (Unaudited) |
|
|
| Three Months Ended |
|
|
|
|
| Fiscal Year Ended |
|
|
|
|
| September 30, |
|
|
|
|
| September 30, |
|
|
|
|
| 2020 |
|
|
|
|
| 2019 |
|
|
|
|
| 2020 |
|
|
|
|
| 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Product sales |
| $ |
| 10,586 |
|
|
|
|
| $ |
| 10,711 |
|
|
|
|
| $ |
| 44,317 |
|
|
|
|
| $ |
| 40,219 |
|
|
| Royalties and license fees |
|
|
| 9,867 |
|
|
|
|
|
|
| 16,806 |
|
|
|
|
|
|
| 40,634 |
|
|
|
|
|
|
| 48,458 |
|
|
| Research, development and other |
|
|
| 2,090 |
|
|
|
|
|
|
| 3,299 |
|
|
|
|
|
|
| 9,913 |
|
|
|
|
|
|
| 11,400 |
|
|
| Total revenue |
|
|
| 22,543 |
|
|
|
|
|
|
| 30,816 |
|
|
|
|
|
|
| 94,864 |
|
|
|
|
|
|
| 100,077 |
|
|
| Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Product costs |
|
|
| 3,902 |
|
|
|
|
|
|
| 3,659 |
|
|
|
|
|
|
| 15,317 |
|
|
|
|
|
|
| 13,639 |
|
|
| Research and development |
|
|
| 12,787 |
|
|
|
|
|
|
| 14,523 |
|
|
|
|
|
|
| 50,188 |
|
|
|
|
|
|
| 52,885 |
|
|
| Selling, general and administrative |
|
|
| 7,300 |
|
|
|
|
|
|
| 7,186 |
|
|
|
|
|
|
| 28,392 |
|
|
|
|
|
|
| 23,950 |
|
|
| Acquired in-process research and development |
|
|
| — |
|
|
|
|
|
|
| 890 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 890 |
|
|
| Acquired intangible asset amortization |
|
|
| 547 |
|
|
|
|
|
|
| 596 |
|
|
|
|
|
|
| 2,218 |
|
|
|
|
|
|
| 2,405 |
|
|
| Contingent consideration expense (gain) |
|
|
| — |
|
|
|
|
|
|
| 87 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (161 |
| ) |
| Total operating costs and expenses |
|
|
| 24,536 |
|
|
|
|
|
|
| 26,941 |
|
|
|
|
|
|
| 96,115 |
|
|
|
|
|
|
| 93,608 |
|
|
| Operating (loss) income |
|
|
| (1,993 |
| ) |
|
|
|
|
| 3,875 |
|
|
|
|
|
|
| (1,251 |
| ) |
|
|
|
|
| 6,469 |
|
|
| Other (expense) income, net |
|
|
| (85 |
| ) |
|
|
|
|
| 243 |
|
|
|
|
|
|
| (203 |
| ) |
|
|
|
|
| 1,089 |
|
|
| (Loss) income before income taxes |
|
|
| (2,078 |
| ) |
|
|
|
|
| 4,118 |
|
|
|
|
|
|
| (1,454 |
| ) |
|
|
|
|
| 7,558 |
|
|
| Income tax (provision) benefit |
|
|
| (868 |
| ) |
|
|
|
|
| (564 |
| ) |
|
|
|
|
| 2,577 |
|
|
|
|
|
|
| 34 |
|
|
| Net (loss) income |
| $ |
| (2,946 |
| ) |
|
|
| $ |
| 3,554 |
|
|
|
|
| $ |
| 1,123 |
|
|
|
|
| $ |
| 7,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic (loss) income per share: |
| $ |
| (0.22 |
| ) |
|
|
| $ |
| 0.27 |
|
|
|
|
| $ |
| 0.08 |
|
|
|
|
| $ |
| 0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted (loss) income per share: |
| $ |
| (0.22 |
| ) |
|
|
| $ |
| 0.26 |
|
|
|
|
| $ |
| 0.08 |
|
|
|
|
| $ |
| 0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
| 13,639 |
|
|
|
|
|
|
| 13,400 |
|
|
|
|
|
|
| 13,552 |
|
|
|
|
|
|
| 13,389 |
|
|
| Diluted |
|
|
| 13,639 |
|
|
|
|
|
|
| 13,769 |
|
|
|
|
|
|
| 13,812 |
|
|
|
|
|
|
| 13,779 |
|
|
| Surmodics, Inc. and Subsidiaries |
| Condensed Consolidated Balance Sheets |
| (in thousands) |
| (Unaudited) |
|
|
|
|
| September 30, |
|
|
|
|
|
|
| 2020 |
|
|
|
|
| 2019 |
|
|
| Assets |
|
|
|
|
|
|
| Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
| $ |
| 30,785 |
|
|
|
|
| $ |
| 30,361 |
|
|
| Available-for-sale securities |
|
|
|
|
| 30,313 |
|
|
|
|
|
|
| 24,931 |
|
|
| Accounts receivable, net |
|
|
|
|
| 7,675 |
|
|
|
|
|
|
| 8,993 |
|
|
| Contract assets — royalties and license fees |
|
|
|
|
| 6,108 |
|
|
|
|
|
|
| 8,210 |
|
|
| Inventories, net |
|
|
|
|
| 5,966 |
|
|
|
|
|
|
| 4,501 |
|
|
| Prepaids and other |
|
|
|
|
| 5,761 |
|
|
|
|
|
|
| 4,424 |
|
|
| Total Current Assets |
|
|
|
|
| 86,608 |
|
|
|
|
|
|
| 81,420 |
|
|
| Property and equipment, net |
|
|
|
|
| 30,103 |
|
|
|
|
|
|
| 29,748 |
|
|
| Deferred income taxes |
|
|
|
|
| 7,315 |
|
|
|
|
|
|
| 6,176 |
|
|
| Intangible assets, net |
|
|
|
|
| 13,283 |
|
|
|
|
|
|
| 14,226 |
|
|
| Goodwill |
|
|
|
|
| 27,185 |
|
|
|
|
|
|
| 26,171 |
|
|
| Other assets |
|
|
|
|
| 4,269 |
|
|
|
|
|
|
| 2,124 |
|
|
| Total Assets |
|
|
| $ |
| 168,763 |
|
|
|
|
| $ |
| 159,865 |
|
|
| Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contingent consideration |
|
|
|
|
| — |
|
|
|
|
|
|
| 3,200 |
|
|
| Deferred revenue |
|
|
|
|
| 5,200 |
|
|
|
|
|
|
| 5,553 |
|
|
| Other current liabilities |
|
|
|
|
| 13,692 |
|
|
|
|
|
|
| 11,456 |
|
|
| Total Current Liabilities |
|
|
|
|
| 18,892 |
|
|
|
|
|
|
| 20,209 |
|
|
| Deferred revenue |
|
|
|
|
| 10,796 |
|
|
|
|
|
|
| 11,628 |
|
|
| Other long-term liabilities |
|
|
|
|
| 8,020 |
|
|
|
|
|
|
| 5,512 |
|
|
| Total Liabilities |
|
|
|
|
| 37,708 |
|
|
|
|
|
|
| 37,349 |
|
|
| Total Stockholders’ Equity |
|
|
|
|
| 131,055 |
|
|
|
|
|
|
| 122,516 |
|
|
| Total Liabilities and Stockholders’ Equity |
|
|
| $ |
| 168,763 |
|
|
|
|
| $ |
| 159,865 |
|
|
| Surmodics, Inc. and Subsidiaries |
| Supplemental Segment Information |
| (in thousands) |
| (Unaudited) |
|
|
|
|
| Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
|
| 2019 |
|
|
|
|
|
|
|
|
| Revenue: |
|
|
|
|
|
|
| % of Total |
|
|
|
|
|
|
| % of Total |
|
|
| % Change |
|
|
| Medical Device |
|
|
| $ |
| 17,179 |
|
|
|
|
|
|
| 76.2 |
| % |
|
|
| $ |
| 24,849 |
|
|
|
|
|
|
| 80.6 |
| % |
|
|
| (30.9 |
| )% |
|
|
| In Vitro Diagnostics |
|
|
|
|
| 5,364 |
|
|
|
|
|
|
| 23.8 |
| % |
|
|
|
|
| 5,967 |
|
|
|
|
|
|
| 19.4 |
| % |
|
|
| (10.1 |
| )% |
|
|
| Total revenue |
|
|
| $ |
| 22,543 |
|
|
|
|
|
|
|
|
| $ |
| 30,816 |
|
|
|
|
|
|
|
|
| (26.8 |
| )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fiscal Year Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
|
| 2019 |
|
|
|
|
|
|
|
|
| Revenue: |
|
|
|
|
|
|
| % of Total |
|
|
|
|
|
|
| % of Total |
|
|
| % Change |
|
|
| Medical Device |
|
|
| $ |
| 71,401 |
|
|
|
|
|
|
| 75.3 |
| % |
|
|
| $ |
| 78,353 |
|
|
|
|
|
|
| 78.3 |
| % |
|
|
| (8.9 |
| )% |
|
|
| In Vitro Diagnostics |
|
|
|
|
| 23,463 |
|
|
|
|
|
|
| 24.7 |
| % |
|
|
|
|
| 21,724 |
|
|
|
|
|
|
| 21.7 |
| % |
|
|
| 8.0 |
| % |
|
|
| Total revenue |
|
|
| $ |
| 94,864 |
|
|
|
|
|
|
|
|
| $ |
| 100,077 |
|
|
|
|
|
|
|
|
| (5.2 |
| )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
|
|
| Fiscal Year Ended |
|
|
|
|
|
|
|
|
| September 30, |
|
|
| September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
|
| 2019 |
|
|
| 2020 |
|
|
| 2019 |
|
|
|
|
|
|
|
|
| Operating (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medical Device |
|
|
| $ |
| (1,902 |
| ) |
|
|
| $ |
| 3,707 |
|
|
|
|
| $ |
| (3,246 |
| ) |
|
|
| $ |
| 4,794 |
|
|
|
|
|
|
|
|
|
|
| In Vitro Diagnostics |
|
|
|
|
| 2,456 |
|
|
|
|
|
|
| 2,774 |
|
|
|
|
|
|
| 11,771 |
|
|
|
|
|
|
| 10,620 |
|
|
|
|
|
|
|
|
|
|
| Total segment operating (loss) income |
|
|
|
|
| 554 |
|
|
|
|
|
|
| 6,481 |
|
|
|
|
|
|
| 8,525 |
|
|
|
|
|
|
| 15,414 |
|
|
|
|
|
|
|
|
|
|
| Corporate |
|
|
|
|
| (2,547 |
| ) |
|
|
|
|
| (2,606 |
| ) |
|
|
|
|
| (9,776 |
| ) |
|
|
|
|
| (8,945 |
| ) |
|
|
|
|
|
|
|
|
| Total (loss) income from operations |
|
|
| $ |
| (1,993 |
| ) |
|
|
| $ |
| 3,875 |
|
|
|
|
| $ |
| (1,251 |
| ) |
|
|
| $ |
| 6,469 |
|
|
|
|
|
|
|
|
|
|
| Surmodics, Inc. and Subsidiaries |
| Reconciliation of GAAP Measures to Non-GAAP Amounts |
| Schedule of EBITDA, Adjusted EBITDA and Cash Flows from Operations |
| (in thousands) |
| (Unaudited) |
|
|
| Three Months Ended |
|
|
|
|
| Fiscal Year Ended |
|
|
|
|
| September 30, |
|
|
|
|
| September 30, |
|
|
|
|
| 2020 |
|
|
|
|
| 2019 |
|
|
|
|
| 2020 |
|
|
|
|
| 2019 |
|
|
| Net (loss) income |
| $ |
| (2,946 |
| ) |
|
|
| $ |
| 3,554 |
|
|
|
|
| $ |
| 1,123 |
|
|
|
|
| $ |
| 7,592 |
|
|
| Income tax provision (benefit) |
|
|
| 868 |
|
|
|
|
|
|
| 564 |
|
|
|
|
|
|
| (2,577 |
| ) |
|
|
|
|
| (34 |
| ) |
| Depreciation and amortization |
|
|
| 1,873 |
|
|
|
|
|
|
| 1,850 |
|
|
|
|
|
|
| 7,263 |
|
|
|
|
|
|
| 7,312 |
|
|
| Investment income, net |
|
|
| (72 |
| ) |
|
|
|
|
| (247 |
| ) |
|
|
|
|
| (656 |
| ) |
|
|
|
|
| (1,097 |
| ) |
| Interest expense |
|
|
| 34 |
|
|
|
|
|
|
| 40 |
|
|
|
|
|
|
| 133 |
|
|
|
|
|
|
| 152 |
|
|
| EBITDA |
|
|
| (243 |
| ) |
|
|
|
|
| 5,761 |
|
|
|
|
|
|
| 5,286 |
|
|
|
|
|
|
| 13,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contingent consideration expense (gain) (2) |
|
|
| — |
|
|
|
|
|
|
| 87 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (161 |
| ) |
| Foreign exchange loss (3) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (126 |
| ) |
| Loss (gain) on strategic investment (4) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 479 |
|
|
|
|
|
|
| (7 |
| ) |
| Acquired in-process research and development (5) |
|
|
| — |
|
|
|
|
|
|
| 890 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 890 |
|
|
| Claim settlement accrual (6) |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (650 |
| ) |
| Asset impairment (7) |
|
|
| — |
|
|
|
|
|
|
| 256 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 256 |
|
|
| Adjusted EBITDA |
| $ |
| (243 |
| ) |
|
|
| $ |
| 6,994 |
|
|
|
|
| $ |
| 5,765 |
|
|
|
|
| $ |
| 14,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Cash Provided by Operating Activities |
| $ |
| 1,314 |
|
|
|
|
| $ |
| 12,520 |
|
|
|
|
| $ |
| 14,010 |
|
|
|
|
| $ |
| 8,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Surmodics, Inc., and Subsidiaries |
| Net (Loss) Income and Diluted EPS GAAP to Non-GAAP Reconciliation |
| (in thousands, except per share data) |
| (Unaudited) |
|
|
|
|
| Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating |
|
|
|
|
| Before |
|
|
|
|
| Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| Operating |
|
|
|
|
| Loss |
|
|
|
|
| Income |
|
|
|
|
| Loss |
|
|
|
|
| Diluted |
|
|
|
|
| Effective |
|
|
|
|
| Revenue |
|
|
|
|
| Loss |
|
|
|
|
| Percentage |
|
|
|
|
| Taxes |
|
|
|
|
| (9) |
|
|
|
|
| EPS |
|
|
|
|
| tax rate |
| GAAP |
|
|
| $ |
| 22,543 |
|
|
|
|
| $ |
| (1,993 |
| ) |
|
|
|
|
| (8.8 |
| )% |
|
|
| $ |
| (2,078 |
| ) |
|
|
| $ |
| (2,946 |
| ) |
|
|
| $ |
| (0.22 |
| ) |
|
|
|
|
| (41.8 |
| )% |
|
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets (1) |
|
|
|
|
| — |
|
|
|
|
|
|
| 547 |
|
|
|
|
|
|
| 2.4 |
| % |
|
|
|
|
| 547 |
|
|
|
|
|
|
| 517 |
|
|
|
|
|
|
| 0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP |
|
|
| $ |
| 22,543 |
|
|
|
|
| $ |
| (1,446 |
| ) |
|
|
|
|
| (6.4 |
| )% |
|
|
| $ |
| (1,531 |
| ) |
|
|
| $ |
| (2,429 |
| ) |
|
|
| $ |
| (0.18 |
| ) |
|
|
|
|
| (58.7 |
| )% |
|
|
|
|
|
|
| Three Months Ended September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating |
|
|
|
|
| Before |
|
|
|
|
| Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| Operating |
|
|
|
|
| Income |
|
|
|
|
| Income |
|
|
|
|
| Income |
|
|
|
|
| Diluted |
|
|
|
|
| Effective |
|
|
|
|
| Revenue |
|
|
|
|
| Income |
|
|
|
|
| Percentage |
|
|
|
|
| Taxes |
|
|
|
|
| (9) |
|
|
|
|
| EPS |
|
|
|
|
| tax rate |
| GAAP |
|
|
| $ |
| 30,816 |
|
|
|
|
| $ |
| 3,875 |
|
|
|
|
|
|
| 12.6 |
| % |
|
|
| $ |
| 4,118 |
|
|
|
|
| $ |
| 3,554 |
|
|
|
|
| $ |
| 0.26 |
|
|
|
|
|
|
| 13.7 |
| % |
|
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets (1) |
|
|
|
|
| — |
|
|
|
|
|
|
| 596 |
|
|
|
|
|
|
| 1.9 |
| % |
|
|
|
|
| 596 |
|
|
|
|
|
|
| 551 |
|
|
|
|
|
|
| 0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
| Contingent consideration expense (2) |
|
|
|
|
| — |
|
|
|
|
|
|
| 87 |
|
|
|
|
|
|
| 0.3 |
| % |
|
|
|
|
| 87 |
|
|
|
|
|
|
| 87 |
|
|
|
|
|
|
| 0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
| Acquired in-process research and development (5) |
|
|
|
|
| — |
|
|
|
|
|
|
| 890 |
|
|
|
|
|
|
| 2.9 |
| % |
|
|
|
|
| 890 |
|
|
|
|
|
|
| 703 |
|
|
|
|
|
|
| 0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
| Asset impairment (7) |
|
|
|
|
| — |
|
|
|
|
|
|
| 256 |
|
|
|
|
|
|
| 0.8 |
| % |
|
|
|
|
| 256 |
|
|
|
|
|
|
| 256 |
|
|
|
|
|
|
| 0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP |
|
|
| $ |
| 30,816 |
|
|
|
|
| $ |
| 5,704 |
|
|
|
|
|
|
| 18.5 |
| % |
|
|
| $ |
| 5,947 |
|
|
|
|
| $ |
| 5,151 |
|
|
|
|
| $ |
| 0.37 |
|
|
|
|
|
|
| 13.4 |
| % |
|
|
| Surmodics, Inc., and Subsidiaries |
| Net Income and Diluted EPS GAAP to Non-GAAP Reconciliation – Continued |
| (in thousands, except per share data) |
| (Unaudited) |
|
|
|
|
| Fiscal Year Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating |
|
|
|
|
| (Income) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating |
|
|
|
|
| Loss |
|
|
|
|
| Before |
|
|
|
|
| Net |
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| Loss |
|
|
|
|
| (Income) |
|
|
|
|
| Income |
|
|
|
|
| Income |
|
|
|
|
| Diluted |
|
|
|
|
| Effective |
|
|
|
|
| Revenue |
|
|
|
|
| (Income) |
|
|
|
|
| Percentage |
|
|
|
|
| Taxes |
|
|
|
|
| (9) |
|
|
|
|
| EPS |
|
|
|
|
| tax rate |
|
|
|
|
| GAAP |
|
|
| $ |
| 94,864 |
|
|
|
|
| $ |
| (1,251 |
| ) |
|
|
|
|
| (1.3 |
| )% |
|
|
| $ |
| (1,454 |
| ) |
|
|
| $ |
| 1,123 |
|
|
|
|
| $ |
| 0.08 |
|
|
|
|
|
|
| 177.2 |
| % |
|
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets (1) |
|
|
|
|
| — |
|
|
|
|
|
|
| 2,218 |
|
|
|
|
|
|
| 2.3 |
| % |
|
|
|
|
| 2,218 |
|
|
|
|
|
|
| 2,076 |
|
|
|
|
|
|
| 0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
| Loss on strategic investment (4) |
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 479 |
|
|
|
|
|
|
| 378 |
|
|
|
|
|
|
| 0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
| Tax impact of CARES Act (8) |
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (1,768 |
| ) |
|
|
|
|
| (0.13 |
| ) |
|
|
|
|
|
|
|
|
|
|
| Non-GAAP |
|
|
| $ |
| 94,864 |
|
|
|
|
| $ |
| 967 |
|
|
|
|
|
|
| 1.0 |
| % |
|
|
| $ |
| 1,243 |
|
|
|
|
| $ |
| 1,809 |
|
|
|
|
| $ |
| 0.13 |
|
|
|
|
|
|
| (45.5 |
| )% |
|
|
|
|
|
|
| Fiscal Year Ended September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating |
|
|
|
|
| Before |
|
|
|
|
| Net |
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| Operating |
|
|
|
|
| Income |
|
|
|
|
| Income |
|
|
|
|
| Income |
|
|
|
|
| Diluted |
|
|
|
|
| Effective |
|
|
|
|
| Revenue |
|
|
|
|
| Income |
|
|
|
|
| Percentage |
|
|
|
|
| Taxes |
|
|
|
|
| (9) |
|
|
|
|
| EPS |
|
|
|
|
| tax rate |
|
|
|
|
| GAAP |
|
|
| $ |
| 100,077 |
|
|
|
|
| $ |
| 6,469 |
|
|
|
|
|
|
| 6.5 |
| % |
|
|
| $ |
| 7,558 |
|
|
|
|
| $ |
| 7,592 |
|
|
|
|
| $ |
| 0.55 |
|
|
|
|
|
|
| (0.4 |
| )% |
|
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
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|
|
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|
|
|
|
| Amortization of acquired intangible assets (1) |
|
|
|
|
| — |
|
|
|
|
|
|
| 2,405 |
|
|
|
|
|
|
| 2.4 |
| % |
|
|
|
|
| 2,405 |
|
|
|
|
|
|
| 2,226 |
|
|
|
|
|
|
| 0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
| Contingent consideration gain (2) |
|
|
|
|
| — |
|
|
|
|
|
|
| (161 |
| ) |
|
|
|
|
| (0.2 |
| )% |
|
|
|
|
| (161 |
| ) |
|
|
|
|
| (161 |
| ) |
|
|
|
|
| (0.01 |
| ) |
|
|
|
|
|
|
|
|
|
|
| Foreign exchange gain (3) |
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (126 |
| ) |
|
|
|
|
| (126 |
| ) |
|
|
|
|
| (0.01 |
| ) |
|
|
|
|
|
|
|
|
|
|
| Gain on strategic investment (4) |
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (7 |
| ) |
|
|
|
|
| (7 |
| ) |
|
|
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
| Acquired in-process research and development (5) |
|
|
|
|
| — |
|
|
|
|
|
|
| 890 |
|
|
|
|
|
|
| 0.9 |
| % |
|
|
|
|
| 890 |
|
|
|
|
|
|
| 703 |
|
|
|
|
|
|
| 0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
| Claim settlement (6) |
|
|
|
|
| — |
|
|
|
|
|
|
| (650 |
| ) |
|
|
|
|
| (0.6 |
| )% |
|
|
|
|
| (650 |
| ) |
|
|
|
|
| (514 |
| ) |
|
|
|
|
| (0.04 |
| ) |
|
|
|
|
|
|
|
|
|
|
| Asset impairment (7) |
|
|
|
|
| — |
|
|
|
|
|
|
| 256 |
|
|
|
|
|
|
| 0.2 |
| % |
|
|
|
|
| 256 |
|
|
|
|
|
|
| 256 |
|
|
|
|
|
|
| 0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP |
|
|
| $ |
| 100,077 |
|
|
|
|
| $ |
| 9,209 |
|
|
|
|
|
|
| 9.2 |
| % |
|
|
| $ |
| 10,165 |
|
|
|
|
| $ |
| 9,969 |
|
|
|
|
| $ |
| 0.72 |
|
|
|
|
|
|
| 1.9 |
| % |
|
|
| (1) |
| Amortization of business acquisition-related intangible assets and associated tax impact. A significant portion of the business acquisition-related amortization is not tax deductible. |
| (2) |
| Represents accounting adjustments to state acquisition-related contingent consideration liabilities at their estimated fair value, including accretion for the passage of time as well as adjustments to the liabilities’ fair values related to changes in the timing and/or probability of achieving milestones. These amounts are not taxable or tax deductible. |
| (3) |
| Foreign exchange gains and losses are related to marking non-U.S. dollar contingent consideration to period-end or settlement date exchange rates. These gains and losses are not taxable or tax deductible. |
| (4) |
| In fiscal 2020, represents the loss recognized on the impairment of a strategic investment for which an effective rate of 21% was used to estimate the income tax impact. In fiscal 2019, represents the gain recognized on the sale of a strategic investment which was not tax-effected as it was offset by previously recognized capital losses. |
| (5) |
| Represents acquisition of in-process research and development assets, net of the associated tax impact. |
| (6) |
| Represents a royalty-related customer claim accrued at $1.0 million in the second quarter of fiscal 2018, settled in the second quarter of fiscal 2019 for $0.4 million. |
| (7) |
| Impairment of indefinite-lived intangible assets which were not tax deductible. |
| (8) |
| Represents the income tax benefit recognized from the carryback of net operating losses under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in March 2020. |
| (9) |
| Net (loss) income includes the effect of the above adjustments on the income tax provision (benefit), taking into account deferred taxes and non-deductible items. In both fiscal 2020 and fiscal 2019, an effective rate of 21% was used to estimate the income tax impact of the adjustments, except that expenses occurring in Ireland have not been tax-effected as all tax benefits are offset by a full valuation allowance. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20201104005530/en/
Surmodics, Inc.
Tim Arens, 952-500-7000
ir@surmodics.com