EXTON, Pa., Feb. 1, 2011 /PRNewswire/ -- Kensey Nash
Corporation (Nasdaq: KNSY), a medical device company primarily
focused on regenerative medicine for a wide range of medical
procedures, today reported the results for its second quarter ended
December 31, 2010.
Second Quarter Snapshot and Recent Developments
- Diluted EPS of $0.38, in line
with the Company's previous guidance of $0.37-$0.40, and representing an increase from
the prior year comparable quarter's diluted EPS of $0.32 and a decrease from the prior year
comparable quarter's adjusted diluted EPS*of $0.43.
- Revenue of $17.4 million, in line
with the Company's previous guidance of $17.0-$17.8 million and representing a decrease
from the prior year comparable quarter's revenue of $19.1 million.
- Net sales of $10.9 million, in
line with the Company's previous guidance of $10.3-$11.0 million and representing a decrease
from the prior year comparable quarter's net sales of $12.5 million.
- Royalty income of $6.5 million,
below the Company's previous guidance of $6.7-$6.8 million and representing a decrease
from the prior year comparable quarter's royalty income of
$6.6 million.
- Operating margin of 29%.
- Cash from operations of $2.2
million in the quarter.
- EBITDA* of $6.8 million.
- Entered into a manufacturing agreement with, and made a
minority equity investment in, Orteq Sports Medicine, a medical
device company specializing in the field of biodegradable polymer
technology for meniscus repair.
- Signed distribution agreement with Arthrex, Inc. for the
European distribution of the Company's Cartilage Repair
Device.
- Acquired the net assets of Nerites Corporation, a developer of
medical adhesives and anti-fouling coatings (See the Company's
January 31, 2011 press release).
President and CEO Commentary
"Although our second quarter results were in line with our
expectations, the issues of high unemployment and a challenging
health insurance environment continue to impact our industry.
However, the inventory reduction efforts by some of our
larger customers are subsiding, as we are beginning to experience
an increase in orders which should improve our results for the
balance of the fiscal year," commented Joe
Kaufmann, President and CEO of the Company. "We expect
our sports medicine and spine product sales will increase by
approximately 30% and 50% sequentially in our third quarter.
Overall, sales of our biomaterials products are expected to
increase by an amount in the range of 8% to 10% sequentially in our
third quarter despite an anticipated decline in cardiology collagen
sales to St. Jude Medical of approximately 25%. Furthermore,
we are optimistic that our fourth quarter will continue to show
growth in our biomaterial business due to the ongoing expansion of
the ECM products distributed by our strategic partner, Synthes, as
well as an improvement in the overall business climate."
Supplemental Sales Data. Details of the Company's
net sales for the three and six months ended December 31, 2010 and 2009 are summarized below.
|
|
|
Three Months
Ended
December 31,
|
Year
over
Year %
Change
|
Six Months
Ended
December 31,
|
Year
over
Year %
Change
|
|
($
millions)
|
2010
|
2009
|
|
2010
|
2009
|
|
|
Biomaterials
Products
|
|
|
|
|
|
|
|
Orthopaedic
Products
|
|
|
|
|
|
|
|
Sports
Medicine Products
|
$2.6
|
$3.1
|
(14%)
|
$5.3
|
$6.7
|
(20%)
|
|
Spine
Products
|
2.0
|
2.8
|
(30%)
|
4.5
|
5.6
|
(19%)
|
|
Other
Orthopaedic Products
|
0.2
|
0.1
|
34%
|
0.3
|
0.2
|
23%
|
|
Total Orthopaedic
Products
|
$4.8
|
$6.0
|
(20%)
|
$10.1
|
$12.5
|
(19%)
|
|
Cardiovascular
Products
|
4.1
|
4.3
|
(5%)
|
8.4
|
9.3
|
(10%)
|
|
General Surgery
Products
|
1.4
|
1.1
|
29%
|
2.0
|
2.2
|
(11%)
|
|
Other Biomaterial
Products
|
0.3
|
0.2
|
73%
|
0.6
|
0.2
|
n/a
|
|
Biomaterials
Products
|
$10.6
|
$11.6
|
(9%)
|
$21.1
|
$24.2
|
(13%)
|
|
Endovascular
Products
|
$0.3
|
$0.8
|
(68%)
|
$0.7
|
$1.7
|
(57%)
|
|
Total Net Sales
|
$10.9
|
$12.5
|
(13%)
|
$21.8
|
$25.9
|
(16%)
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Ended December 31,
2010 (Second Quarter Fiscal 2011) Results
Revenues: Sales and Royalties. Total revenues for
the quarter of $17.4 million
decreased 9% from total revenues of $19.1
million in the prior year second quarter. Revenues for the
quarter increased 2% sequentially from $17.0
million in the first quarter of fiscal 2011.
Net sales were in line with expectations at $10.9 million, which represents a decrease of 13%
from $12.5 million in the prior
fiscal year comparable period and were flat sequentially with
$10.9 million in the first quarter of
fiscal 2011. Total biomaterials products sales were
$10.6 million compared to
$11.6 million in the comparable prior
fiscal year period. Orthopaedic sales, consisting primarily of
sports medicine and spine products, decreased $1.2 million to $4.8 million in the second
quarter of fiscal 2011 from $6.0
million in the prior fiscal year comparable quarter. Sports
medicine product sales decreased $0.5
million to $2.6 million in the second quarter of fiscal 2011
from $3.1 million in the prior fiscal
year comparable quarter. Spine product sales decreased
$0.8 million to $2.0 million in the
second quarter of fiscal 2011 from $2.8
million in the prior fiscal year comparable quarter.
The decrease in spine product sales reflected a continued
overall weakness in the spine market, as well as inventory
reductions by the Company's largest spine products customer.
Cardiovascular sales of $4.1 million,
consisting primarily of sales of vascular closure product
components to St. Jude Medical (NYSE: STJ), decreased $0.2 million from $4.3
million in the prior fiscal year period.
Partially offsetting these decreases was an increase in general
surgery sales, consisting primarily of sales of the Company's new
extracellular matrix (ECM) product, the XCM Biologic which is
licensed to the Company's strategic partner Synthes. Sales of
ECM products were $1.1 million in the
second quarter of fiscal 2011 compared to less than $0.1 million in the prior year comparable
quarter, and the Company expects to experience further increases in
the second half of the fiscal year as the ECM product sales
continue to expand in the U.S. and as the launch outside the U.S.
gains momentum. Offsetting the increase in general surgery
sales associated with the ECM products was a decrease in sales of
breast biopsy products, which were $0.2
million during the quarter compared to $1.0 million in the prior year comparable quarter
due to inventory stocking orders placed in the second quarter
fiscal 2010. Endovascular sales during the quarter were
$0.3 million compared to $0.8 million in the prior fiscal year second
quarter.
Royalty income for the second quarter of fiscal 2011 was
$6.5 million, compared to
$6.6 million in the comparable prior
fiscal year period. Royalty income in the second quarter of fiscal
2011 included $4.9 million in
Angio-Seal™ royalties and $1.4
million in royalties from Orthovita, Inc. (Nasdaq: VITA).
Angio-Seal™ royalties decreased by approximately 2% or
$0.1 million in the second quarter of
fiscal 2011 compared to the prior fiscal year quarter.
Royalties from Orthovita decreased by approximately 7% or
$0.1 million compared to the prior
fiscal year period reflecting the impact of the general negative
economic conditions in the spine markets.
Earnings Per Share. Second quarter diluted earnings
per share were $0.38, compared to
diluted earnings per share and adjusted diluted earnings per share*
(which exclude the charges described below) of $0.32 and $0.43,
respectively, for the same period of fiscal 2010. Positively
affecting the second quarter fiscal 2011 diluted earnings per share
when compared to the prior year was a significantly lower number of
weighted average common shares outstanding due to the Company's
stock repurchase programs. In the second quarter of fiscal
2010, the Company implemented a cost reduction plan which resulted
in $1.9 million in charges,
consisting of a pre-tax severance charge of approximately
$1.0 million and a pre-tax unabsorbed
overhead expense charge of approximately $0.9 million. Adjusted diluted earnings per
share* for the second quarter of fiscal 2010 exclude these
$1.9 million in charges.
Six Months Ended December 31,
2010 Results
Revenues: Sales and Royalties. Total revenues for
the six months ended December 31,
2010 of $34.3 million
decreased 12% from total revenues of $38.8
million in the prior fiscal year period.
Net sales of $21.8 million
decreased 16% from $25.9 million in
the prior fiscal year comparable period. Total
biomaterials products sales were $21.1
million compared to $24.2
million in the comparable prior fiscal year period.
Orthopaedic sales, consisting primarily of sports medicine and
spine products, decreased $2.4
million from $12.5 million to $10.1
million. Sports medicine product sales decreased
$1.4 million to $5.3 million in the
six months ended December 31, 2010
from $6.7 million in the prior fiscal
year comparable period. Spine product sales decreased
$1.1 million to $4.5 million in the
six months ended December 31, 2010
from $5.6 million in the prior fiscal
year comparable period. Cardiovascular sales of $8.4 million, consisting primarily of sales of
vascular closure product components to St. Jude Medical, decreased
$0.9 million in the six months ended
December 31, 2010 from $9.3 million in the prior fiscal year period.
General surgery sales, which include ECM and breast biopsy
products, decreased $0.2 million.
Sales of the ECM products were $1.7
million compared to less than $0.1
million in the prior year. This increase in ECM
product sales reflected the market launch of our new products by
our strategic partner, Synthes. Breast biopsy products were
$0.2 million compared to $2.2 million in the prior fiscal year comparable
period due to inventory stocking orders placed in the first half of
fiscal 2010. Endovascular sales for the six months ended
December 31, 2010 were $0.7 million compared to $1.7 million in the prior fiscal year period.
Royalty income for the six months ended December 31, 2010 was $12.5 million, compared to $12.9 million in the comparable prior fiscal year
period. Royalty income in the six months ended December 31, 2010 included $9.5 million in Angio-Seal™ royalties and
$2.8 million in royalties from
Orthovita, Inc. Angio-Seal™ royalties decreased by
approximately 4% or $0.4 million in
the six months ended December 31,
2010 over the prior fiscal year comparable period.
Royalties from Orthovita decreased by approximately 3% or
$0.1 million compared to the prior
fiscal year period.
Earnings Per Share. For the six months ended
December 31, 2010 earnings per share
were $0.79, compared to diluted
earnings per share of $0.75 and
adjusted diluted earnings per share* (which exclude the charges
described above) of $0.86 for the
same period of fiscal 2010. Positively affecting the year to date
fiscal 2011 diluted earnings per share when compared to the prior
year was a significantly lower number of weighted average common
shares outstanding due to the Company's stock repurchase
programs.
During the six months ended December 31,
2010, the Company's total tax-effected equity compensation
expense was $1.5 million, an increase
of approximately $0.4 million from
$1.0 million in the prior year
comparable period. Tax-effected equity compensation expense for the
six months ended December 31, 2010
was higher than the comparable prior year period primarily because
the first quarter fiscal 2011 expense included amortized expense
related to three years of equity grants, while first quarter fiscal
2010 equity compensation expense included amortized expense for
only two years of equity grants.
During the six months ended December 31,
2010, the Company generated cash from operations of
$9.4 million and, at December 31, 2010, had $42.8 million of cash and investment balances and
total debt of $30.7 million. In
January 2011, the Company acquired
the net assets of Nerites Corporation, a developer of medical
adhesives and anti-fouling coatings for $20
million in cash, of which $17
million was paid at closing with the remainder expected to
be paid over the next two years.
Fiscal 2011 Guidance
The Company currently expects total revenues for fiscal year
2011 will be in the range of $73.0 to $75.0
million. Net sales and royalties are currently
expected to be in the ranges of $46.7 to
$48.3 million and $26.3 to $26.6
million, respectively. The Company had previously included
approximately $1.5 million of
endovascular milestone revenue in its guidance but has eliminated
this from its current guidance due to the uncertainty of receiving
these payments from Spectranectics.
The Company currently expects diluted earnings per share for
fiscal 2011 will be in the range of $1.70 to
$1.75 (excluding any in-process R&D charges and
acquisition costs related to Nerites).
Fiscal 2011 will include a significant investment in research
and development, with total research and development spending for
fiscal 2011 estimated to be approximately $17 to $18 million. The Company plans to
increase its clinical activities for the ECM products in the U.S.
and outside the U.S. However, due to the significant cost and
risk of obtaining U.S. regulatory approval with the uncertain U.S.
regulatory climate, restrictive clinical requirements, protracted
patient enrollment and extended follow up timeframe for the
Company's cartilage technology in the U.S., the Company is shifting
its clinical activities for the cartilage product outside the U.S.
The Company plans to reallocate its research and development
funds towards products with more predictable near term regulatory
approval criteria.
The Company currently expects that its operating margin will be
approximately 33% in fiscal 2011 and its balance sheet will
continue to be strengthened by adding cash from operations for the
full fiscal year of approximately $20
million (excluding any in-process R&D charges and
acquisition costs related to Nerites).
The Company is currently estimating that third quarter fiscal
2011 total revenues will be in the range of $18.5 to $19.0 million. Net sales are currently
expected to be in the range of $11.7 to
$12.1 million, and royalties are currently expected to be in
the range of $6.8 to $6.9 million.
The Company currently expects third quarter fiscal 2011
diluted earnings per share of $0.42 to
$0.44 (excluding any in-process R&D charges and
acquisition costs related to Nerites).
Stock Repurchase Update. During the six months ended
December 31, 2010, the Company
repurchased 1,175,738 shares of Common Stock, at a total cost of
approximately $30.0 million, or an
average market price of $25.52 per
share, using available cash. This completed the latest
$30 million repurchase program.
The Company had 8,523,360 shares of Common Stock outstanding
as of December 31, 2010.
Income taxes. The Company currently estimates that
its fiscal 2011 effective tax rate will be between 32% and 33%.
In the course of estimating the Company's annual effective
tax rate and recording its quarterly income tax provision, the
Company considers many factors, including its expected earnings,
state income tax apportionment, estimated manufacturing and
research and development tax credits, non-taxable interest income
and other estimates. Material changes in, or differences from these
estimates could have a significant impact on the Company's
effective tax rate. As a result of the December 2010 Congressional approval of an
extension of the Research and Experimentation (R&E) Tax Credit,
the Company recorded retroactive adjustments to its tax provision
during its fiscal quarter ended December 31,
2010. The adjustments reflect the fact that the
legislation is retroactive to January 1,
2010 and, therefore, reduced the Company's effective tax
rate to approximately 29% for the second quarter. The Company
anticipates its effective tax rate for each of the third and fourth
quarters of fiscal 2011 to be approximately 33%, including the
related quarter's R&E Tax Credit effect on the tax
provision.
* EBITDA and adjusted diluted earnings per share excluding
after-tax severance and unabsorbed overhead charges are non-GAAP
financial measures and should not be considered replacements for
GAAP results or guidance. For a reconciliation of these
non-GAAP financial measures to the most directly comparable GAAP
financial measures, see the accompanying table to this release.
Conference Call and Webcast. The Company will be
hosting a teleconference discussing the earnings results on
Tuesday, February 1, 2011 at
9:00 A.M. Eastern Time. To
participate in the teleconference call, please dial 1-612-332-1020.
The teleconference call will also be available for replay starting
Tuesday, February 1, 2011 at
11:00 A.M. Eastern Time through
Tuesday, February 8, 2011 at
11:59 P.M. Eastern Time by dialing
1-800-475-6701 with an access code of 187632.
Individuals interested in listening to the teleconference may
also do so over the Internet at www.kenseynash.com. To listen
to the live teleconference call, please go to the
www.kenseynash.com website and choose the Investor Relations page.
Please allow 15 minutes prior to the start of the call to
register and download and/or install any necessary software.
A replay of the teleconference will be archived on the
www.kenseynash.com website and may be accessed following the
teleconference.
About Kensey Nash Corporation. Kensey Nash Corporation is
a medical device company primarily focused on regenerative medicine
utilizing its proprietary collagen and synthetic polymer
technology. The Company is recognized as a leader for
innovative product development and unique technology in the field
of resorbable biomaterials. The Company has an extensive
range of products, which are sold through strategic partners in
multiple medical markets, including the cardiology, orthopaedic,
sports medicine, spine, endovascular and general surgery
markets.
Cautionary Note for Forward-Looking Statements.
This press release contains forward-looking statements that
reflect the current expectations of Kensey Nash Corporation (the
Company) about its prospects and opportunities, including financial
forecasts and estimates for the third quarter of fiscal 2011 and
the full fiscal year 2011 under the caption "Fiscal 2011 Guidance"
and other captions. The Company has tried to identify these
forward looking statements by using words such as "expect,"
"anticipate," "estimate," "plan," "will," "would," "should,"
"forecast," "believe," "guidance," "projection" or similar
expressions, but these words are not the exclusive means for
identifying such statements. The Company cautions that a number of
risks, uncertainties and other important factors could cause the
Company's actual results to differ materially from those in the
forward-looking statements including, without limitation, St. Jude
Medical's success in selling the Angio-Seal device and the extent
to which, after December 31, 2010,
St. Jude is able to and does in fact rely on its internal
manufacturing to fulfill its requirements for collagen plugs for
the Angio-Seal device, the success of the Company's customers and
partners (including St. Jude Medical, Arthrex, Orthovita, Orteq and
Synthes) in selling Kensey Nash
related products in the marketplace, the Company's success in its
research and development efforts (including in its cartilage
repair, extracellular matrix and endovascular programs), the
success of clinical trials in both the U.S. and outside the U.S. to
support regulatory approval of the Company's products, and
competition from other technologies, as well as tax and other risks
associated with healthcare reform, economic conditions and foreign
currency fluctuations. For a detailed discussion of factors that
could affect the Company's future operating results, please see the
Company's SEC filings, including the disclosures under "Risk
Factors" in those filings. Except as expressly required by
the federal securities laws, the Company undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, changed circumstances or future events
or for any other reason.
– FINANCIAL INFORMATION TO FOLLOW –
KENSEY NASH
CORPORATION
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
Three
Months
|
|
Six
Months
|
|
|
Ended
December 31, 2010
|
|
Ended
December 31, 2010
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
Biomaterial
sales
|
$
10,630,328
|
|
$ 11,634,701
|
|
$ 21,051,784
|
|
$ 24,209,747
|
|
Endovascular
sales
|
269,333
|
|
834,990
|
|
727,832
|
|
1,692,646
|
|
Total net
sales
|
10,899,661
|
|
12,469,691
|
|
21,779,616
|
|
25,902,393
|
|
Royalty
income
|
6,455,262
|
|
6,600,941
|
|
12,539,906
|
|
12,910,057
|
|
Total revenues
|
17,354,923
|
|
19,070,632
|
|
34,319,522
|
|
38,812,450
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
6,339,696
|
|
6,491,985
|
|
10,559,821
|
|
12,030,385
|
|
Research and
development
|
3,969,787
|
|
4,686,515
|
|
8,247,170
|
|
8,962,086
|
|
Selling, general
and administrative
|
2,065,632
|
|
2,104,307
|
|
4,363,507
|
|
4,284,238
|
|
Total operating costs and expenses
|
12,375,115
|
|
13,282,807
|
|
23,170,498
|
|
25,276,709
|
|
Income from
operations
|
4,979,808
|
|
5,787,825
|
|
11,149,024
|
|
13,535,741
|
|
Interest and other
(expense)/income, net
|
(292,027)
|
|
(334,737)
|
|
(647,980)
|
|
(715,397)
|
|
Pre-tax income
|
4,687,781
|
|
5,453,088
|
|
10,501,044
|
|
12,820,344
|
|
Income tax expense
|
1,354,156
|
|
1,793,559
|
|
3,322,529
|
|
4,280,006
|
|
Net income
|
$
3,333,625
|
|
$
3,659,529
|
|
$ 7,178,515
|
|
$ 8,540,338
|
|
Basic earnings per
share
|
$
0.39
|
|
$
0.33
|
|
$
0.82
|
|
$
0.77
|
|
Diluted earnings per
share
|
$
0.38
|
|
$
0.32
|
|
$
0.79
|
|
$
0.75
|
|
Weighted average common shares
outstanding
|
8,511,339
|
|
11,048,532
|
|
8,774,481
|
|
11,084,961
|
|
Diluted weighted average common
shares outstanding
|
8,816,750
|
|
11,367,673
|
|
9,035,543
|
|
11,422,716
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited)
|
|
|
December
31,
|
|
June
30,
|
|
|
2010
|
|
2010
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
26,825,172
|
|
$ 23,102,362
|
|
Investments
|
15,952,106
|
|
42,571,544
|
|
Trade
receivables
|
4,521,998
|
|
5,307,563
|
|
Other
receivables
|
6,302,865
|
|
6,938,013
|
|
Inventory
|
9,945,869
|
|
8,885,875
|
|
Prepaid expenses
and other assets
|
3,019,121
|
|
1,091,760
|
|
Deferred tax
asset, current
|
1,802,526
|
|
2,857,262
|
|
Total current assets
|
68,369,657
|
|
90,754,379
|
|
Property, plant and equipment,
net
|
53,230,106
|
|
54,984,890
|
|
Deferred tax asset,
non-current
|
1,539,984
|
|
1,872,619
|
|
Other non-current
assets
|
10,080,431
|
|
6,508,841
|
|
Total assets
|
$ 133,220,178
|
|
$ 154,120,729
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
and accrued expenses
|
$
3,760,000
|
|
$
7,955,650
|
|
Other current
liabilities
|
230,457
|
|
131,836
|
|
Current portion of
debt
|
1,399,997
|
|
1,399,997
|
|
Deferred
revenue
|
1,047,321
|
|
947,378
|
|
Total current liabilities
|
6,437,775
|
|
10,434,861
|
|
Long-term portion of
debt
|
29,283,333
|
|
29,983,333
|
|
Deferred revenue,
non-current
|
2,889,241
|
|
3,336,780
|
|
Other non-current
liabilities
|
5,014,887
|
|
5,542,509
|
|
Total stockholders'
equity
|
89,594,942
|
|
104,823,246
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Total liabilities and
stockholders' equity
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$ 133,220,178
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|
$ 154,120,729
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|
|
|
|
Non-GAAP
Financial Measures and Reconciliations
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As used
herein, “GAAP” refers to generally accepted accounting principles
in the United States. We use various numerical measures in
conference calls, investor meetings and other forums which are or
may be considered "Non-GAAP financial measures" under Regulation G.
We have provided below for your reference supplemental financial
disclosure for these measures, including the most directly
comparable GAAP measure and an associated
reconciliation.
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Second
Quarter Fiscal 2011 Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)
|
|
|
|
|
|
|
|
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Three Months
Ended
|
|
|
|
|
December 31,
2010
|
|
($ millions)
|
|
|
|
|
Net Income - GAAP
|
|
|
$
3.3
|
|
Income Tax Expense
|
|
|
1.4
|
|
Interest Income
|
|
|
(0.1)
|
|
Interest Expense
|
|
|
0.5
|
|
Depreciation and
Amortization
|
|
|
1.7
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|
EBITDA
|
|
|
$
6.8
|
|
|
|
|
|
Second
Quarter Fiscal 2011 and Prior Year Comparable Second Quarter Fiscal
2010 Adjusted Earnings Per
Share
|
|
|
|
|
|
|
|
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Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
December 31,
2010
|
|
December 31,
2009
|
|
December 31,
2010
|
|
December 31,
2009
|
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Diluted Earnings Per Share -
GAAP
|
$
0.38
|
|
$
0.32
|
|
$
0.79
|
|
$
0.75
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|
Cost Reduction Plan
Charges (a)
|
|
|
0.11
|
|
|
|
0.11
|
|
Adjusted Diluted Earnings Per
Share
|
|
|
$
0.43
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|
|
|
$
0.86
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|
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|
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|
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(a) Diluted earnings per
share for the second quarter of fiscal 2010 included total charges
of approximately $1.9 million incurred in connection with a cost
reduction plan primarily associated with reduced endovascular
activities and to lower overall inventory levels. This plan
included approximately $1.0 million in severance charges ($660,000
in after-tax charges), or $0.06 per share tax-effected, incurred as
a result of headcount reduction, and approximately $0.9 million in
unabsorbed overhead expense charges ($610,000 in after-tax
charges), or $0.05 per share tax-effected, incurred as a result of
reduced work schedules during the second quarter of fiscal
2010.
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Note: To
supplement our consolidated financial statements presented in
accordance with GAAP, Kensey Nash Corporation uses non-GAAP
measures, such as EBITDA and Adjusted Diluted Earnings Per Share.
EBITDA represents our GAAP results adjusted to exclude
interest, taxes, depreciation and amortization. Adjusted
Diluted Earnings Per Share is adjusted from our GAAP results to
exclude certain expenses described above. These non-GAAP
measures are provided to enhance the user's overall understanding
of our historical and current financial performance. We
believe the non-GAAP results provide useful information to both
management and investors by excluding certain non-operating items
and non-cash expenses.
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These non-GAAP measures
provide investors and management with an alternative method for
assessing Kensey Nash’s operating results. Further, these
non-GAAP measures are one of several primary indicators management
uses for planning and forecasting. The presentation of this
additional information should not be considered in isolation of, or
as a substitute for, results prepared in accordance with accounting
principles generally accepted in the United States.
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SOURCE Kensey Nash Corporation