MINNEAPOLIS, Aug. 1, 2017 /PRNewswire/ -- Cogentix
Medical, Inc. (NASDAQ: CGNT), a global medical device company
focused on providing the Urology, Uro/Gyn and Gynecology markets
with innovative and proprietary products, today reported financial
results for the second quarter ended June
30, 2017.
Second Quarter and Business Development Highlights
- Second quarter revenue was $14.1
million, including $12.3
million in Urology product revenue. Urology product revenue,
representing 87% of total revenue, increased 11% over last year's
second quarter and 12% on a constant currency basis. Total Company
revenue for the second quarter increased 8% over the prior year
period and 9% on a constant currency basis.
- Gross profit was $9.4 million or
66.9%, a $0.5 million increase over
the prior year period.
- GAAP operating income was $0.4
million in the second quarter, compared to a GAAP operating
loss of $2.3 million in the year ago
quarter.
- Cash operating profit, a non-GAAP financial measure that
excludes non-cash items, was $1.5
million in the second quarter, an increase of $0.7 million when compared to the cash operating
profit of $0.8 million in the second
quarter of 2016.
- The Company continues to evaluate strategic alternatives for
its non-core Industrial and Airway Management product lines.
- In July, the Company announced completion of two business
development transactions expected to add approximately 10 points of
urology products revenue growth in 2018.
"Cogentix achieved another quarter of double-digit organic
revenue growth from our core Urology business," said Darin Hammers, President and CEO. "This growth
was driven by impressive results from our PrimeSight™ product line,
which grew 48% in the quarter, as our physician customers continue
to embrace the always ready, always sterile value proposition
PrimeSight offers. Unit sales of our Urgent® PC product line
grew 5% in the United States
during the second quarter, and the average selling price was
consistent with the last several quarters. Our sales and
marketing team continues to perform at a high level, and we have
decided to expand our US sales force by five territories during the
third quarter. As a result, we anticipate second half 2017
revenue growth for our Urology business will be above the 11%
growth we generated in the first half of the year. Additionally,
the two business development agreements we recently executed should
add approximately 10 points of growth to urology products revenue
in 2018 as these agreements leverage our strong sales and marketing
organization. With $27 approximately
million in cash and investments, and no debt on our balance sheet,
we are continuing to evaluate other business development
opportunities so that we can further enhance our growth profile
while building value for shareholders."
Financial Results for the Second Quarter Ended June 30, 2017
For the quarter ended June 30,
2017, the Company achieved total revenue of $14.1 million compared to $13.0 million in the year ago quarter. The
$1.1 million increase in reported
revenue is attributable to a $1.2
million increase in Urology revenue, partially offset by a
decrease in non-core Industrial and Airway Management revenue.
Revenue from PrimeSight totaled $5.0
million, up $1.6 million or
48% from the comparable year-ago period. Urgent PC revenue totaled
$5.3 million compared to $5.4 million in the comparable year ago period,
comprised of 5% unit growth in the U.S. offset by lower average
selling prices as compared to the year ago quarter. Revenue from
Macroplastique® and other urology product revenue in the
quarter totaled $2.0 million, a
decrease of approximately $250,000
compared to the prior year period.
Gross margin for the quarter ended June
30, 2017 was 66.9% compared with 68.6% in the year-ago
period, with the decrease due to a shift in product mix. Operating
expenses in the quarter totaled $9.0
million, flat with the $9.0
million of operating expenses, excluding certain one-time
charges, in the same period of the prior year.
Operating profit for the quarter was $0.4
million compared to an operating loss of $2.3 million ($0.1
million excluding one-time charges) in the year ago period.
Cash operating profit, a non-GAAP financial measure that is
operating profit excluding all non-cash items, was $1.5 million for the quarter ended June 30, 2017 compared to a cash operating profit
of $0.8 million (excluding one-time
charges) in the year-ago quarter. Net income was $0.4 million ($0.01
per share) in the quarter ended June 30,
2017, compared to a net loss of $2.7
million ($0.10 per share) in
the comparable year-ago period.
At June 30, 2017, the Company's
cash and investments totaled $26.9
million, compared to $25.8
million at March 31, 2017.
There were no borrowings under the Company's $7.0 million line of credit as of June 30, 2017.
Six Month Financial Results Ended June
30, 2017
For the six-month period ended June 30,
2017, total revenue of $27.0
million represented an increase of 7% over the year ago
period. This increase is due to 11% growth in the Urology
business, partially offset by a decline in non-core Airway
Management and Industrial revenue.
Operating loss for the six months ended June 30, 2017 was $0.8
million while cash operating profit (which excludes non-cash
items) was $1.4 million.
Conference Call
Cogentix Medical will host a conference call and webcast today
at 4:30 p.m. Eastern Time
(3:30 p.m. Central Time).
Darin Hammers, President and Chief
Executive Officer, will host the event along with Brett Reynolds, Chief Financial Officer.
Individuals wishing to participate in the conference call should
dial 877-303-1595 with the conference ID number 57924692. To access
a live webcast of the call, go to the investor relations section of
Cogentix Medical's website at ir.cogentixmedical.com.
An audio replay will be available for 30 days following the call
at 855-859-2056 with the conference ID number 57924692. An archived
webcast will also be available at ir.cogentixmedical.com.
About Cogentix Medical
Cogentix Medical, Inc.,
headquartered in Minnetonka,
Minnesota, with additional operations in New York, Massachusetts, The
Netherlands and the United
Kingdom, is a global medical device company. We
design, develop, manufacture and market products for flexible
endoscopy with our unique PrimeSight™ product lines featuring a
streamlined visualization system and proprietary sterile disposable
microbial barrier providing users with efficient and cost effective
endoscope turnover while enhancing patient safety. We also
commercialize the Urgent® PC Neuromodulation System, an FDA-cleared
device that delivers percutaneous tibial nerve stimulation (PTNS)
for the office-based treatment of overactive bladder (OAB). OAB is
a chronic condition that affects approximately 42 million U.S.
adults. The symptoms include urinary urgency, frequency and urge
incontinence. We also offer Macroplastique®, an injectable
urethral bulking agent for the treatment of adult female stress
urinary incontinence primarily due to intrinsic sphincter
deficiency. For more information on Cogentix Medical and our
products, please visit us at www.cogentixmedical.com. 'CGNT-G'
For Further Information:
Cogentix Medical, Inc.
Brett Reynolds, SVP and CFO
952-426-6152
EVC Group
Brian Moore/Doug Sherk
310-579-6199/415-652-9100
Cautionary Statements Related to Forward-Looking
Statements
This press release includes forward-looking statements. These
forward-looking statements generally can be identified by the use
of words such as "anticipate," "expect," "plan," "could," "may,"
"will," "believe," "estimate," "forecast," "goal," "project," and
other words of similar meaning. Forward-looking statements in this
press release include, but are not limited to, statements about
expected revenue growth rates; the Company's expectations regarding
operating profit and cash operating profit; and plans, objectives,
expectations and intentions with respect to future operations,
products and services. Each forward-looking statement contained in
this press release is subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied by such statement. Applicable risks and uncertainties
include, among others, the effects of industry, economic or
political conditions outside of the Company's control; competitive
market factors; actual or contingent liabilities; the adequacy of
the Company's capital resources; and the risks identified under the
heading "Risk Factors" in the annual report on Form 10-K, for the
year ended December 31, 2016, filed
with the Securities and Exchange Commission ("SEC") on March 30, 2017. Investors are cautioned to not to
place considerable reliance on the forward-looking statements
contained in this presentation. Investors are encouraged to read
the Company's filings with the SEC, available at www.sec.gov, for a
discussion of these and other risks and uncertainties. The
forward-looking statements in this presentation speak only as of
the date of this release, and the Company undertakes no obligation
to update or revise any of these statements. The Company's
businesses are subject to substantial risks and uncertainties,
including those referenced above. Investors, potential investors,
and others should give careful consideration to these risks and
uncertainties.
COGENTIX MEDICAL,
INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
Three Months
Ended June
30,
|
|
Six Months
Ended June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Net sales
|
$14,064,216
|
|
$13,004,651
|
|
$27,014,349
|
|
$25,211,215
|
Cost of goods
sold
|
4,658,334
|
|
4,087,165
|
|
9,152,247
|
|
7,888,359
|
|
|
|
|
|
|
|
|
Gross
profit
|
9,405,882
|
|
8,917,486
|
|
17,862,102
|
|
17,322,856
|
|
66.9%
|
|
68.6%
|
|
66.1%
|
|
68.7%
|
Operating
expenses
|
|
|
|
|
|
|
|
General and
administrative
|
2,058,327
|
|
1,867,312
|
|
4,194,483
|
|
3,529,781
|
Research and
development
|
1,031,851
|
|
1,100,056
|
|
2,322,509
|
|
2,036,934
|
Selling and
marketing
|
5,347,078
|
|
5,433,439
|
|
11,002,038
|
|
11,069,201
|
Amortization of
intangibles
|
588,646
|
|
590,858
|
|
1,179,199
|
|
1,181,716
|
One-time
costs
|
-
|
|
2,177,990
|
|
-
|
|
2,311,541
|
|
9,025,902
|
|
11,169,655
|
|
18,698,229
|
|
20,129,173
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
379,980
|
|
(2,252,169)
|
|
(836,127)
|
|
(2,806,317)
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest
income
|
61,834
|
|
170
|
|
121,558
|
|
405
|
Interest
expense
|
(130)
|
|
(376,363)
|
|
(13,625)
|
|
(766,667)
|
Other
income
|
6,192
|
|
-
|
|
6,364
|
|
-
|
Foreign currency
exchange gain (loss)
|
33,453
|
|
(17,844)
|
|
46,193
|
|
(25,406)
|
|
101,349
|
|
(394,037)
|
|
160,490
|
|
(791,668)
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
481,329
|
|
(2,646,206)
|
|
(675,637)
|
|
(3,597,985)
|
|
|
|
|
|
|
|
|
Income tax
expense
|
61,700
|
|
18,561
|
|
115,151
|
|
33,190
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$419,629
|
|
$(2,664,767)
|
|
$(790,788)
|
|
$(3,631,175)
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per common share
|
$0.01
|
|
$(0.10)
|
|
$(0.01)
|
|
$(0.14)
|
Diluted net income
(loss) per common share
|
$0.01
|
|
$(0.10)
|
|
$(0.01)
|
|
$(0.14)
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
59,895,208
|
|
25,518,330
|
|
59,767,542
|
|
25,446,765
|
Diluted
|
60,349,439
|
|
25,518,330
|
|
59,767,542
|
|
25,446,765
|
COGENTIX MEDICAL,
INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
|
|
June 30,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$10,431,068
|
|
$9,369,624
|
Short-term investments
|
14,275,494
|
|
13,573,057
|
Accounts receivable, net
|
7,313,021
|
|
6,770,838
|
Inventories
|
7,235,436
|
|
7,235,043
|
Other
|
616,166
|
|
571,527
|
Total current
assets
|
39,871,185
|
|
37,520,089
|
|
|
|
|
Property, plant,
and equipment, net
|
2,186,034
|
|
2,115,316
|
Goodwill
|
18,749,888
|
|
18,749,888
|
Other intangible
assets, net
|
8,303,379
|
|
9,482,578
|
Long-term
investments
|
2,218,233
|
|
5,344,004
|
Deferred tax
assets and other
|
162,034
|
|
163,427
|
Total
assets
|
$71,490,753
|
|
$73,375,302
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$1,644,109
|
|
$2,689,035
|
Income tax payable
|
90,762
|
|
113,191
|
Accrued liabilities:
|
|
|
|
Compensation
|
3,536,817
|
|
4,670,640
|
Deferred revenue
|
629,538
|
|
597,524
|
Accrued legal fees
|
46,627
|
|
34,667
|
Accrued foreign and domestic sales tax/VAT
|
413,731
|
|
327,992
|
Accrued employee expenses
|
79,121
|
|
88,557
|
Other
|
741,564
|
|
387,056
|
|
|
|
|
Total current
liabilities
|
7,182,269
|
|
8,908,662
|
|
|
|
|
Accrued pension
liability
|
360,429
|
|
308,918
|
Deferred
rent
|
613,888
|
|
639,019
|
Other
|
62,426
|
|
278,780
|
|
|
|
|
Total
liabilities
|
8,219,012
|
|
10,135,379
|
|
|
|
|
Total
shareholders' equity
|
63,271,741
|
|
63,239,923
|
|
|
|
|
Total
liabilities and shareholders' equity
|
$71,490,753
|
|
$73,375,302
|
COGENTIX MEDICAL,
INC. AND SUBSIDIARIES
|
|
CONDENSED
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
Six Months
Ended
|
|
June
30,
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$(790,788)
|
|
$(3,631,175)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,544,473
|
|
1,590,903
|
Loss on disposal of
equipment
|
233
|
|
-
|
Share-based
compensation expense
|
703,320
|
|
224,999
|
Amortization of
premium on available-for-sale securities
|
68,829
|
|
-
|
Deferred tax benefit
(expense)
|
6,764
|
|
(1,161)
|
Deferred
rent
|
(14,983)
|
|
9,895
|
Proceeds from
restricted stock exchanged for taxes
|
(17,690)
|
|
(57,343)
|
Amortization of
discount on related party debt
|
-
|
|
554,247
|
Long-term incentive
plan
|
-
|
|
(46,870)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
(402,955)
|
|
1,691,231
|
Inventories
|
7,333
|
|
(1,096,308)
|
Other current
assets
|
(31,230)
|
|
68,790
|
Accounts
payable
|
(1,050,123)
|
|
104,130
|
Interest
payable
|
-
|
|
178,359
|
Accrued
compensation
|
(1,349,293)
|
|
1,059,496
|
Accrued liabilities,
other
|
384,213
|
|
118,912
|
Accrued pension
liability
|
27,338
|
|
42,862
|
Deferred revenue
|
24,402
|
|
250,679
|
Net cash provided by
(used in) operating activities
|
(890,157)
|
|
1,061,646
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Proceeds from maturity
of available-for-sale securities
|
4,800,000
|
|
-
|
Purchases of
available-for-sale securities
|
(2,438,322)
|
|
-
|
Purchases of property,
plant and equipment
|
(398,426)
|
|
(166,976)
|
Net cash provided by
(used in) investing activities
|
1,963,252
|
|
(166,976)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings from
line of credit
|
3,033,385
|
|
2,646,500
|
Repayments of
line of credit
|
(3,033,385)
|
|
(2,646,500)
|
Proceeds from
exercise of stock options
|
3,953
|
|
-
|
Net cash provided by
financing activities
|
3,953
|
|
-
|
|
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
(15,604)
|
|
(4,184)
|
|
|
|
|
Net increase in cash
and cash equivalents
|
1,061,44
|
|
890,486
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
9,369,624
|
|
1,976,594
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$10,431,068
|
|
$2,867,080
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
Cash paid during the
period for income tax
|
$135,936
|
|
$19,378
|
Cash paid during the
period for interest
|
$13,625
|
|
$34,061
|
|
|
|
|
Non-GAAP Financial Measures:
The tables set forth below entitled "Cash Operating Profit
(Unaudited)" provide the non-GAAP cash operating profit for the
Company for the three and six months ended June 30, 2017 and June
30, 2016. These tables reconcile the Company's
operating income / loss calculated in accordance with GAAP to the
Company's cash operating profit, a non-GAAP financial measure that
excludes one-time costs and non-cash charges for share-based
compensation, depreciation and amortization.
The non-GAAP financial information used by management and
disclosed by us is not a substitute for, nor superior to, financial
information and consolidated financial results calculated in
accordance with GAAP, and you should carefully evaluate our
reconciliations to non-GAAP. We may calculate our non-GAAP
financial information differently from similarly titled measures
used by other companies. Therefore, our non-GAAP financial
information may not be comparable to those used by other
companies. We have described the reconciliations of each of
our non-GAAP financial information described above to the most
directly comparable GAAP financial measures.
We use this non-GAAP financial information, and in particular
non-GAAP cash operating profit / loss, for internal managerial
purposes because we believe such measures are one important
indicator of the strength and the operating performance of our
business. Analysts and investors frequently ask us for this
information. We believe that they use this information to
evaluate the overall operating performance of companies in our
industry, including as a means of comparing period-to-period
results and as a means of evaluating our results with those of
other companies.
Q2 Additional
Information
|
|
COGENTIX MEDICAL,
INC. AND SUBSIDIARIES
|
REVENUE BY
PRODUCT
|
QUARTER ENDED June
30,
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Market/Product
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
PrimeSight
|
|
$4,983
|
|
$3,377
|
|
$1,606
|
|
47.6%
|
Urgent PC
|
|
5,262
|
|
5,403
|
|
(141)
|
|
(2.6%)
|
Macroplastique
|
|
1,742
|
|
1,985
|
|
(243)
|
|
(12.2%)
|
Other
|
|
284
|
|
307
|
|
(23)
|
|
(7.5%)
|
Total Urology
|
|
12,271
|
|
11,072
|
|
1,199
|
|
10.8%
|
|
|
|
|
|
|
|
|
|
Airway
Management
|
|
755
|
|
852
|
|
(97)
|
|
(11.4%)
|
Industrial
|
|
1,038
|
|
1,081
|
|
(43)
|
|
(4.0%)
|
Total Other
|
|
1,793
|
|
1,933
|
|
(140)
|
|
(7.2%)
|
|
|
|
|
|
|
|
|
|
Combined
Revenue
|
|
$14,064
|
|
$13,005
|
|
$1,059
|
|
8.1%
|
|
|
COGENTIX MEDICAL,
INC. AND SUBSIDIARIES
|
CASH OPERATING PROFIT
(UNAUDITED)
|
(NON-GAAP)
|
QUARTER ENDED June
30,
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
Revenue
|
|
$14,064
|
|
$13,005
|
|
$1,059
|
|
8.1%
|
Gross
profit
|
|
9,406
|
|
8,917
|
|
489
|
|
5.5%
|
|
|
66.9%
|
|
68.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
8,437
|
|
8,400
|
|
37
|
|
0.4%
|
Amortization of
intangibles
|
|
589
|
|
591
|
|
(2)
|
|
(0.3%)
|
One-time
costs
|
|
-
|
|
2,178
|
|
(2,178)
|
|
n/m
|
Operating income
(loss)
|
|
380
|
|
(2,252)
|
|
2,632
|
|
(116.9%)
|
|
|
|
|
|
|
|
|
|
Non cash operating
costs
|
|
1,129
|
|
901
|
|
228
|
|
25.3%
|
One-time
costs
|
|
-
|
|
2,178
|
|
(2,178)
|
|
n/m
|
Cash operating
profit, excluding non-cash and one-time costs
|
|
|
|
|
|
|
|
|
|
$1,509
|
|
$827
|
|
$682
|
|
82.5%
|
YTD Additional
Information
|
|
COGENTIX MEDICAL,
INC. AND SUBSIDIARIES
|
REVENUE BY
PRODUCT
|
SIX MONTHS ENDED June
30,
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Market/Product
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
PrimeSight
|
|
$9,441
|
|
$6,463
|
|
$2,978
|
|
46.1%
|
Urgent PC
|
|
10,242
|
|
10,510
|
|
(268)
|
|
(2.5%)
|
Macroplastique
|
|
3,522
|
|
3,839
|
|
(317)
|
|
(8.3%)
|
Other
|
|
521
|
|
592
|
|
(71)
|
|
(12.0%)
|
Total Urology
|
|
23,726
|
|
21,404
|
|
2,322
|
|
10.8%
|
|
|
|
|
|
|
|
|
|
Airway
Management
|
|
1,474
|
|
1,636
|
|
(162)
|
|
(9.9%)
|
Industrial
|
|
1,814
|
|
2,171
|
|
(357)
|
|
(16.4%)
|
Total Other
|
|
3,288
|
|
3,807
|
|
(519)
|
|
(13.6%)
|
|
|
|
|
|
|
|
|
|
Combined
Revenue
|
|
$27,014
|
|
$25,211
|
|
$1,803
|
|
7.2%
|
|
|
|
|
|
|
|
|
|
COGENTIX MEDICAL,
INC. AND SUBSIDIARIES
|
CASH OPERATING PROFIT
(UNAUDITED)
|
(NON-GAAP)
|
SIX MONTHS ENDED June
30,
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
Revenue
|
|
$27,014
|
|
$25,211
|
|
$1,803
|
|
7.2%
|
Gross
profit
|
|
17,862
|
|
17,323
|
|
539
|
|
3.1%
|
|
|
66.1%
|
|
68.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
17,519
|
|
16,636
|
|
883
|
|
5.3%
|
Amortization of
intangibles
|
|
1,179
|
|
1,182
|
|
(3)
|
|
(0.3%)
|
One-time
costs
|
|
-
|
|
2,312
|
|
(2,312)
|
|
n/m
|
Operating
loss
|
|
(836)
|
|
(2,807)
|
|
1,971
|
|
(70.2%)
|
|
|
|
|
|
|
|
|
|
Non cash operating
costs
|
|
2,248
|
|
1,769
|
|
479
|
|
27.1%
|
One-time
costs
|
|
-
|
|
2,312
|
|
(2,312)
|
|
n/m
|
Cash operating
profit, excluding non-cash and one-time costs
|
|
|
|
|
|
|
|
|
|
|
$1,412
|
|
$1,274
|
|
$138
|
|
10.8%
|
View original
content:http://www.prnewswire.com/news-releases/cogentix-medical-reports-strong-second-quarter-operating-results-with-11-urology-revenue-growth-recently-executed-business-development-transactions-expected-to-add-approximately-10-points-of-urology-revenue-growth-in-2018-300497738.html
SOURCE Cogentix Medical, Inc.