UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
July
31, 2014
|
Date of report (Date of earliest event reported)
|
SurModics, Inc.
|
(Exact Name of Registrant as Specified in its Charter)
|
Minnesota
|
|
0-23837
|
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41-1356149
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(State of Incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer
Identification No.)
|
9924 West 74th Street
Eden Prairie, Minnesota
|
|
55344
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(Address
of Principal Executive Offices)
|
|
(Zip
Code)
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(952) 500-7000
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(Registrant’s Telephone Number, Including Area Code)
|
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02
|
|
Results of Operations And Financial Condition.
|
On July 31, 2014, the Company issued a press release (the “Press
Release”) announcing the results for the quarter ended June 30,
2014. A copy of the full text of the Press Release is furnished as
Exhibit 99.1 to this report.
The information contained in this Item 2.02, including Exhibit 99.1,
shall not be deemed to be “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall they be deemed to
be incorporated by reference into any filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific
reference in such a filing.
Item 9.01
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Financial Statements and Exhibits.
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|
|
|
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|
(d)
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Exhibits.
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Exhibit Number
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Description
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99.1
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Press Release dated July 31, 2014.
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SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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SURMODICS, INC.
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|
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Date:
|
July 31, 2014
|
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/s/ Andrew D. C. LaFrence
|
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Andrew D. C. LaFrence
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Vice President Finance and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
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|
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Number
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|
Description
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99.1
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Press Release dated July 31, 2014.
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Exhibit 99.1
SurModics
Reports Third Quarter Fiscal 2014 Results
-
Total
GAAP Revenue of $14.6 Million and GAAP EPS of $0.27
-
Operating
Income Increased 26%
-
Continued
Progress on Paclitaxel Drug Coated Balloon Development
-
Generated
Strong Cash from Operations
-
Raises
Low End of EPS Guidance
-
Filed
$175 Million Universal Shelf Registration Statement
EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--July 31, 2014--SurModics, Inc.
(Nasdaq: SRDX), a leading provider of surface modification and in vitro
diagnostic technologies to the healthcare industries, today announced
results for its fiscal 2014 third quarter.
Commenting on the Company’s performance, SurModics’ President and Chief
Executive Officer Gary Maharaj said, “Despite headwinds faced by our
Medical Device customers, we were able to generate revenue from
non-coronary markets and post solid growth in that segment in our third
quarter. Importantly, our team made significant progress advancing our
drug coated balloon platform, positioning SurModics attractively for the
future. Further, as we expected, SurModics’ In Vitro Diagnostics segment
returned to growth.”
Third Quarter Revenue and Earnings Summary
GAAP revenue for the fiscal 2014 third quarter totaled $14.6 million,
compared with $14.3 million in the fiscal 2013 third quarter.
Diluted earnings per share from continuing operations in the third
quarter of fiscal 2014 increased to $0.27, from $0.22 in the prior-year
period. Maharaj stated, “The increase in earnings per share was driven
both by continued SG&A expense management and the shifting of drug
coated balloon expenditures due to the timing of preparation work for a
first in human trial. We expect R&D spending growth for this initiative
in the fourth quarter of fiscal 2014.”
Medical Device Summary
The Medical Device business unit accounts for approximately
three-quarters of the Company’s total revenue. This unit, which includes
hydrophilic coatings and device drug delivery technologies, posted
revenue of $10.8 million in the third quarter of fiscal 2014, increasing
2% from the year-ago period. The third quarter of fiscal 2013 included a
$500,000 non-recurring license milestone payment. Without this payment,
Medical Device revenue grew 7% in the current year quarter. Third
quarter 2014 hydrophilic coating royalty revenue was $7.2 million which
is comparable with the prior-year period. Medical Device generated $5.9
million of operating income during the third quarter, a 12% increase
from a year ago, primarily reflecting revenue gains and the timing of
drug coated balloon R&D investments.
Additional highlights include:
-
One medical device customer launched new products utilizing SurModics
hydrophilic coatings;
-
Strength in non-coronary hydrophilic coatings royalty revenue offset a
7% decline in the coronary sector, reflecting our market
diversification strategy; and
-
Progress continued on development of the paclitaxel drug coated
balloon program.
In Vitro Diagnostics Summary
The In Vitro Diagnostics (IVD) business unit accounts for approximately
one-quarter of the Company’s total revenue. Revenue for the third
quarter of fiscal 2014 totaled $3.8 million, up 3% from the year-ago
period. The IVD business unit generated $1.0 million of operating income
in the third quarter of fiscal 2014, compared with $0.9 million in the
year-ago period.
Balance Sheet and Cash Flow
As of June 30, 2014, the Company had $57.1 million of cash and
investments. SurModics generated cash from operating activities of $12.5
million in the first nine months of 2014, compared with $11.9 million in
the same prior-year period.
The Company earlier today filed a $175 million universal shelf
registration statement on Form S-3 with the United States Securities and
Exchange Commission (SEC). The shelf registration statement cannot be
used to offer or sell securities until it is declared effective by the
SEC. The specifics of any potential future offering, along with the
prices and terms of any such securities offered by the Company will be
determined at the time of any such offering and will be described in
detail in a prospectus supplement filed in connection with such
offering. This press release shall not constitute an offer to sell or
the solicitation of an offer to buy any securities.
“Although we currently do not plan to raise additional capital, the
filing of this shelf registration statement is a prudent move to ensure
we have efficient access to the capital markets to meet the objectives
of our strategic plan,” said Maharaj. “It also provides the financial
flexibility to leverage market conditions and support our future growth.”
Fiscal 2014 Outlook
SurModics updated its previously stated earnings per share outlook for
fiscal 2014. The Company now estimates diluted GAAP earnings from
continuing operations to be in the range of $0.90 to $0.97 per share, an
increase from previous guidance of $0.85 to $0.97 per share. SurModics
is reaffirming its full-year revenue guidance to be in the range of
$56.0 million to $58.5 million. The Company also indicated that fiscal
2014 cash flow from operating activities should be at least $19.0
million, and capital expenditures are expected to range from $2.2
million to $2.5 million.
Live Webcast
SurModics will host a webcast at 4 p.m. CT (5 p.m. ET) today to discuss
third 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 third quarter conference
call will be available by dialing 888-203-1112 and entering conference
call ID passcode 7858616. The audio replay will be available beginning
at 7 p.m. CT on Thursday, July 31, 2014, until 7 p.m. CT on Thursday,
August 7, 2014.
About SurModics, Inc.
SurModics’ mission is to exceed our customers’ expectations and enhance
the well-being of patients by providing the world’s foremost, innovative
surface modification technologies and in vitro diagnostic
chemical components. The Company partners with the world’s leading and
emerging medical device, diagnostic and life science companies to
develop and commercialize innovative products designed to improve lives
by enabling the detection and treatment of disease. Core offerings
include surface modification coating technologies that impart lubricity,
prohealing, and biocompatibility capabilities; and components for in
vitro diagnostic test kits and microarrays. 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 capital needs and its
performance in the near- and long-term, including our revenue, earnings
and cash flow expectations for fiscal 2014, 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 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; (2) our ability to realize the
full potential of our pipeline (including our drug coated balloon
initiatives); (3) our ability to achieve our corporate goals; (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, 2013, 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 generally
accepted accounting principles, or GAAP, SurModics is reporting non-GAAP
financial results including non-GAAP net income and non-GAAP diluted net
income per share. We believe that these non-GAAP measures 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 upon our reported
financial results. As such, these non-GAAP measures presented 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
|
Condensed Consolidated Statements of Income
|
(in thousands, except per share data)
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalties and license fees
|
|
|
$
|
7,385
|
|
|
|
$
|
7,827
|
|
|
|
$
|
22,179
|
|
|
|
$
|
22,294
|
|
Product sales
|
|
|
|
6,067
|
|
|
|
|
5,577
|
|
|
|
|
16,632
|
|
|
|
|
16,688
|
|
Research and development
|
|
|
|
1,164
|
|
|
|
|
885
|
|
|
|
|
3,292
|
|
|
|
|
2,853
|
|
Total revenue
|
|
|
|
14,616
|
|
|
|
|
14,289
|
|
|
|
|
42,103
|
|
|
|
|
41,835
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
|
2,037
|
|
|
|
|
1,990
|
|
|
|
|
5,737
|
|
|
|
|
5,894
|
|
Research and development
|
|
|
|
3,655
|
|
|
|
|
4,009
|
|
|
|
|
11,488
|
|
|
|
|
11,145
|
|
Selling, general and administrative
|
|
|
|
3,591
|
|
|
|
|
4,052
|
|
|
|
|
11,736
|
|
|
|
|
11,552
|
|
Total operating costs and expenses
|
|
|
|
9,283
|
|
|
|
|
10,051
|
|
|
|
|
28,961
|
|
|
|
|
28,591
|
|
Operating income from continuing operations
|
|
|
|
5,333
|
|
|
|
|
4,238
|
|
|
|
|
13,142
|
|
|
|
|
13,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
|
42
|
|
|
|
|
60
|
|
|
|
|
194
|
|
|
|
|
187
|
|
Other income
|
|
|
|
28
|
|
|
|
|
2
|
|
|
|
|
834
|
|
|
|
|
1,460
|
|
Impairment loss on investments
|
|
|
―
|
|
|
―
|
|
|
―
|
|
|
|
(129
|
)
|
Other income, net
|
|
|
|
70
|
|
|
|
|
62
|
|
|
|
|
1,028
|
|
|
|
|
1,518
|
|
Income from continuing operations before income taxes
|
|
|
|
5,403
|
|
|
|
|
4,300
|
|
|
|
|
14,170
|
|
|
|
|
14,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
(1,729
|
)
|
|
|
|
(1,122
|
)
|
|
|
|
(4,407
|
)
|
|
|
|
(3,916
|
)
|
Income from continuing operations
|
|
|
|
3,674
|
|
|
|
|
3,178
|
|
|
|
|
9,763
|
|
|
|
|
10,846
|
|
(Loss) income from discontinued operations, net of taxes
|
|
|
|
(76
|
)
|
|
|
|
(47
|
)
|
|
|
|
(76
|
)
|
|
|
|
635
|
|
Net income
|
|
|
$
|
3,598
|
|
|
|
$
|
3,131
|
|
|
|
$
|
9,687
|
|
|
|
$
|
11,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.27
|
|
|
|
$
|
0.22
|
|
|
|
$
|
0.72
|
|
|
|
$
|
0.74
|
|
Discontinued operations
|
|
|
|
(0.01
|
)
|
|
|
|
0.00
|
|
|
|
|
(0.01
|
)
|
|
|
|
0.04
|
|
Net income
|
|
|
$
|
0.26
|
|
|
|
$
|
0.22
|
|
|
|
$
|
0.71
|
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.27
|
|
|
|
$
|
0.22
|
|
|
|
$
|
0.70
|
|
|
|
$
|
0.73
|
|
Discontinued operations
|
|
|
|
(0.01
|
)
|
|
|
|
0.00
|
|
|
|
|
(0.01
|
)
|
|
|
|
0.04
|
|
Net income
|
|
|
$
|
0.26
|
|
|
|
$
|
0.21
|
|
|
|
$
|
0.70
|
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
13,585
|
|
|
|
|
14,413
|
|
|
|
|
13,639
|
|
|
|
|
14,563
|
|
Diluted
|
|
|
|
13,813
|
|
|
|
|
14,739
|
|
|
|
|
13,891
|
|
|
|
|
14,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SurModics, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(in thousands)
|
|
|
|
|
June 30,
|
|
|
September 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
(Unaudited)
|
Assets
|
|
|
|
|
|
|
Cash and short-term investments
|
|
|
$
|
40,611
|
|
|
$
|
25,707
|
Accounts receivable
|
|
|
|
5,176
|
|
|
|
5,332
|
Inventories
|
|
|
|
2,900
|
|
|
|
3,328
|
Other current assets
|
|
|
|
2,039
|
|
|
|
1,366
|
Current assets of discontinued operations
|
|
|
|
85
|
|
|
|
46
|
Total current assets
|
|
|
|
50,811
|
|
|
|
35,779
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
12,710
|
|
|
|
12,845
|
Long-term investments
|
|
|
|
16,497
|
|
|
|
32,397
|
Other assets
|
|
|
|
20,699
|
|
|
|
20,902
|
Total assets
|
|
|
$
|
100,717
|
|
|
$
|
101,923
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
Current liabilities
|
|
|
$
|
4,043
|
|
|
$
|
5,837
|
Current liabilities of discontinued operations
|
|
|
|
75
|
|
|
|
139
|
Total current liabilities
|
|
|
|
4,118
|
|
|
|
5,976
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
|
1,928
|
|
|
|
2,130
|
Total stockholders’ equity
|
|
|
|
94,671
|
|
|
|
93,817
|
Total liabilities and stockholders’ equity
|
|
|
$
|
100,717
|
|
|
$
|
101,923
|
|
|
|
|
|
|
|
|
SurModics, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Cash Flows
|
(in thousands)
|
|
|
|
|
Nine Months Ended
|
|
|
|
June 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
(Unaudited)
|
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
|
$
|
9,687
|
|
|
|
$
|
11,481
|
|
Loss (income) from discontinued operations
|
|
|
|
76
|
|
|
|
|
(635
|
)
|
Depreciation and amortization
|
|
|
|
2,054
|
|
|
|
|
2,174
|
|
Stock-based compensation
|
|
|
|
3,043
|
|
|
|
|
1,983
|
|
Gain on sale of available-for-sale securities and strategic
investments
|
|
|
|
(835
|
)
|
|
|
|
(1,460
|
)
|
Net other operating activities
|
|
|
|
(550
|
)
|
|
|
|
415
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
156
|
|
|
|
|
333
|
|
Accounts payable and accrued liabilities
|
|
|
|
(919
|
)
|
|
|
|
(876
|
)
|
Income taxes
|
|
|
|
(560
|
)
|
|
|
|
(1,520
|
)
|
Net change in other operating assets and liabilities
|
|
|
|
314
|
|
|
|
|
9
|
|
Net cash provided by operating activities from continuing operations
|
|
|
|
12,466
|
|
|
|
|
11,904
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
Net purchases of property and equipment
|
|
|
|
(1,165
|
)
|
|
|
|
(1,448
|
)
|
Cash (transferred to) received from discontinued operations
|
|
|
|
(239
|
)
|
|
|
|
(118
|
)
|
Net other investing activities
|
|
|
|
26,030
|
|
|
|
|
2,174
|
|
Net cash provided by investing activities from continuing operations
|
|
|
|
24,626
|
|
|
|
|
608
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
Purchase of common stock to fund employee taxes
|
|
|
|
(1,114
|
)
|
|
|
|
(39
|
)
|
Repurchase of common stock
|
|
|
|
(12,544
|
)
|
|
|
|
(10,323
|
)
|
Net other financing activities
|
|
|
|
800
|
|
|
|
|
21
|
|
Net cash used in financing activities from continuing operations
|
|
|
|
(12,858
|
)
|
|
|
|
(10,341
|
)
|
Net cash provided by continuing operations
|
|
|
|
24,234
|
|
|
|
|
2,171
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
|
(239
|
)
|
|
|
|
(118
|
)
|
Net cash provided by financing activities
|
|
|
|
239
|
|
|
|
|
118
|
|
Net cash provided by discontinued operations
|
|
|
―
|
|
|
―
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
|
24,234
|
|
|
|
|
2,171
|
|
Cash and Cash Equivalents:
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
15,495
|
|
|
|
|
15,540
|
|
End of period
|
|
|
$
|
39,729
|
|
|
|
$
|
17,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SurModics, Inc. and Subsidiaries
|
Supplemental Segment Information
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
% Change
|
Revenue
|
|
|
|
|
|
% of Total
|
|
|
|
|
|
% of Total
|
|
|
|
Medical Device
|
|
|
$
|
10,821
|
|
|
|
74.0
|
%
|
|
|
$
|
10,591
|
|
|
|
|
74.1
|
%
|
|
|
|
2.2
|
%
|
In Vitro Diagnostics
|
|
|
|
3,795
|
|
|
|
26.0
|
|
|
|
|
3,698
|
|
|
|
|
25.9
|
|
|
|
|
2.6
|
|
Total revenue
|
|
|
$
|
14,616
|
|
|
|
100.0
|
%
|
|
|
$
|
14,289
|
|
|
|
|
100.0
|
%
|
|
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
% Change
|
Revenue
|
|
|
|
|
|
% of Total
|
|
|
|
|
|
% of Total
|
|
|
|
Medical Device
|
|
|
$
|
31,852
|
|
|
|
75.7
|
%
|
|
|
$
|
30,857
|
|
|
|
|
73.8
|
%
|
|
|
|
3.2
|
%
|
In Vitro Diagnostics
|
|
|
|
10,251
|
|
|
|
24.3
|
|
|
|
|
10,978
|
|
|
|
|
26.2
|
|
|
|
|
(6.6
|
)
|
Total revenue
|
|
|
$
|
42,103
|
|
|
|
100.0
|
%
|
|
|
$
|
41,835
|
|
|
|
|
100.0
|
%
|
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Nine Months Ended June 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Device
|
|
|
$
|
5,855
|
|
|
|
$
|
5,223
|
|
|
|
$
|
16,466
|
|
|
|
$
|
15,848
|
|
In Vitro Diagnostics
|
|
|
|
974
|
|
|
|
|
915
|
|
|
|
|
2,277
|
|
|
|
|
2,933
|
|
Corporate
|
|
|
|
(1,496
|
)
|
|
|
|
(1,900
|
)
|
|
|
|
(5,601
|
)
|
|
|
|
(5,537
|
)
|
Total operating income
|
|
|
$
|
5,333
|
|
|
|
$
|
4,238
|
|
|
|
$
|
13,142
|
|
|
|
$
|
13,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SurModics, Inc. and Subsidiaries
|
Supplemental Non-GAAP Information
|
For the Nine Months Ended June 30, 2014
|
(In thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
As Reported
|
|
|
|
|
|
|
Adjusted
|
|
|
|
GAAP(1)
|
|
|
Adjustments
|
|
|
|
Non-GAAP(2)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Royalties and license fees
|
|
|
$
|
22,179
|
|
|
|
|
|
|
$
|
22,179
|
Product sales
|
|
|
|
16,632
|
|
|
|
|
|
|
|
16,632
|
Research and development
|
|
|
|
3,292
|
|
|
|
|
|
|
|
3,292
|
Total revenue
|
|
|
$
|
42,103
|
|
|
|
|
|
|
$
|
42,103
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
13,142
|
|
|
$
|
914
|
|
(3)
|
|
|
$
|
14,056
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
9,763
|
|
|
$
|
(129
|
)
|
(4)
|
|
|
$
|
9,634
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations(5)
|
|
|
$
|
0.70
|
|
|
|
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects operating results in accordance with U.S. generally
accepted accounting principles (GAAP).
|
(2)
|
|
Adjusted Non-GAAP amounts consider adjustments to reduce operating
expenses by $914 associated with acceleration of Board of Director
stock-based compensation awards and a $709 reduction in net
investment income associated with contingent milestone payments
related to the sale of Vessix Vascular shares which were sold in
fiscal 2013. The income tax provision includes an adjustment
associated with the stock-based compensation awards utilizing a
36.5% incremental effective tax rate. The adjustment to reduce net
investment income did not generate a tax benefit as there was an
offsetting establishment of a capital loss valuation reserve
allowance.
|
(3)
|
|
Reflects the pre-tax impact of the operating expense adjustment
noted in (2) above.
|
(4)
|
|
Adjusted to reflect the adjustments noted in (2) above.
|
(5)
|
|
Diluted earnings per share from continuing operations is calculated
using the diluted weighted average shares outstanding for the period
presented.
|
|
|
|
|
SurModics, Inc. and Subsidiaries
|
Supplemental Non-GAAP Information
|
For the Nine Months Ended June 30, 2013
|
(In thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
As Reported
|
|
|
|
|
|
|
Adjusted
|
|
|
|
GAAP(1)
|
|
|
Adjustments
|
|
|
|
Non-GAAP(2)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Royalties and license fees
|
|
|
$
|
22,294
|
|
|
$
|
(570
|
)
|
(3)
|
|
|
$
|
21,724
|
Product sales
|
|
|
|
16,688
|
|
|
|
|
|
|
|
16,688
|
Research and development
|
|
|
|
2,853
|
|
|
|
|
|
|
|
2,853
|
Total revenue
|
|
|
$
|
41,835
|
|
|
$
|
(570
|
)
|
(3)
|
|
|
$
|
41,265
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
13,244
|
|
|
$
|
(570
|
)
|
(3)
|
|
|
$
|
12,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(362
|
)
|
(4)
|
|
|
|
|
|
|
|
|
|
$
|
(1,164
|
)
|
(5)
|
|
|
|
Income from continuing operations
|
|
|
$
|
10,846
|
|
|
$
|
(412
|
)
|
(6)
|
|
|
$
|
8,908
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations(6)
|
|
|
$
|
0.73
|
|
|
|
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects operating results in accordance with U.S. generally
accepted accounting principles (GAAP).
|
(2)
|
|
Adjusted Non-GAAP amounts consider adjustments to reduce royalty
revenue associated with a one-time $570 catch up payment received in
the first quarter of fiscal 2013, a reduction in net investment
income of $1,164 associated with the sale of Vessix Vascular and
OctoPlus shares offset by an impairment loss on the Company’s
investment in ViaCyte, a $412 reduction in the income tax provision
for discrete income tax benefits recognized as noted in detail in
note (4) below and adjustment to the income tax provision for the
one-time royalty revenue utilizing a 36.5% incremental effective tax
rate. The adjustment associated with the net investment income
adjustment did not generate a tax benefit as there was an offsetting
establishment of a capital loss valuation reserve.
|
(3)
|
|
Reflects the pre-tax impact of the $570 one-time royalty catch up
payment noted in (2) above.
|
(4)
|
|
Reflects the after tax impact of the $570 one-time royalty catch up
payment noted in (2) above utilizing a 36.5% incremental effective
tax rate.
|
(5)
|
|
Reflects the pre-tax impact of the net investment income adjustments
noted in (2) above.
|
(6)
|
|
Adjusted to reflect discrete income tax benefits of $261 associated
with the realization of capital loss carrybacks and $151 from the
January 2013 signing of the American Taxpayer Relief Act of 2012
which retroactively reinstated federal R&D tax credits for calendar
2012.
|
(7)
|
|
Diluted earnings per share from continuing operations is calculated
using the diluted weighted average shares outstanding for the period
presented.
|
|
|
|
CONTACT:
SurModics, Inc.
Andy LaFrence, 952-500-7000
Vice
President of Finance and Chief Financial Officer
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