Conference Call Scheduled for Today, May 1,
2019, at 3:30 PM CT (4:30 PM ET)
- Revenues of $63.3 million increased
13.9% from third quarter last year
- Net income was $0.7 million, or
$0.02 per diluted share
- Company increases fiscal 2019
revenue guidance to upper half of previous range
Cardiovascular Systems, Inc. (CSI®) (NASDAQ: CSII), a medical
device company developing and commercializing innovative
interventional treatment systems for patients with peripheral and
coronary artery disease, today reported financial results for its
fiscal third quarter, ended March 31, 2019.
CSI’s third-quarter revenues were $63.3 million, an increase of
$7.7 million, or 13.9%, from the third quarter of fiscal 2018.
Gross profit margin remained healthy at 80.8%.
Selling, general and administrative expenses increased 9.4% to
$41.4 million due to increased investments to support international
expansion. Research and development expenses increased 26.6% to
$9.3 million as a result of planned new product development and
patient enrollment costs in the ECLIPSE clinical trial.
Third-quarter net income was $0.7 million, or $0.02 per basic
and diluted share, compared favorably to net income of $0.4
million, or $0.01 per basic and diluted share, in the prior-year
period. Adjusted EBITDA totaled $4.1 million.
Scott Ward, CSI’s Chairman, President and Chief Executive
Officer, said, “Our strategy to provide exceptional case support,
deliver continuous innovation and produce compelling medical
evidence resonates with our customers. Fiscal year-to-date, these
efforts are translating into market-leading growth in both
peripheral and coronary atherectomy.”
CSI Updates Fiscal 2019 GuidanceWard concluded,
“Consistent with our plan, we have successfully accelerated revenue
growth this year. During the first nine months of fiscal 2019,
revenues increased 13.9% versus 3.9% during the comparable period
one year ago. We are driving growth primarily through increased
adoption of orbital atherectomy domestically and introducing our
technology to new international markets. We remain on track to
achieve revenue of $245 million to $247 million, representing the
upper half of our fiscal 2019 revenue guidance range.”
For fiscal 2019 ending June 30, 2019, CSI anticipates:
- Revenue of $245 million to $247
million, representing 13% to 14% growth compared to fiscal
2018;
- Gross profit as a percentage of
revenues of 80%-81%;
- Net loss equal to 0.5% of revenue to
breakeven; and
- Positive Adjusted EBITDA.
Conference Call Scheduled for Today at 3:30 p.m. CT (4:30
p.m. ET)CSI will host a live conference call and webcast of its
fiscal third-quarter results today, May 1, 2019, at 3:30 p.m. CT
(4:30 p.m. ET). To access the call, dial (833) 241-7255 at least 10
minutes prior to the call and enter the access number 5768999. To
access the live webcast, or replay, click on this
link https://investors.csi360.com/events-and-presentations/events-calendar/default.aspx,
and then click on the webcast link.
Use of Non-GAAP Financial MeasuresTo supplement CSI's
consolidated condensed financial statements prepared in accordance
with U.S. generally accepted accounting principles (GAAP), CSI uses
certain non-GAAP financial measures in this release.
Reconciliations of the non-GAAP financial measures used in this
release to the most comparable U.S. GAAP measures for the
respective periods can be found in tables later in this release
immediately following the consolidated statements of operations.
Non-GAAP financial measures have limitations as analytical tools
and should not be considered in isolation or as a substitute for
CSI's financial results prepared in accordance with GAAP.
About Peripheral Artery Disease (PAD)As many as 18
million Americans, most over age 65, suffer from PAD, which is
caused by the accumulation of plaque in peripheral arteries
reducing blood flow. Symptoms include leg pain when walking or at
rest. Left untreated, PAD can lead to severe pain, immobility,
non-healing wounds and eventually limb amputation. With risk
factors such as diabetes and obesity on the rise, the prevalence of
PAD is growing at double-digit rates.
Millions of patients with PAD may benefit from treatment with
orbital atherectomy utilizing the Stealth 360® and Diamondback 360®
Peripheral Orbital Atherectomy Systems, minimally invasive catheter
systems developed and manufactured by CSI. These systems use a
diamond-coated crown, attached to an orbiting shaft, which sands
away plaque while preserving healthy vessel tissue — a critical
factor in preventing reoccurrences. Balloon angioplasty and stents
have significant shortcomings in treating hard, calcified lesions.
Stents are prone to fractures and high recurrence rates, and
treatment of hard, calcified lesions often leads to vessel damage
and suboptimal results.
About Coronary Artery Disease (CAD)CAD is a
life-threatening condition and a leading cause of death in men and
women in the United States. CAD occurs when a fatty material called
plaque builds up on the walls of arteries that supply blood to the
heart. The plaque buildup causes the arteries to harden and narrow
(atherosclerosis), reducing blood flow. The risk of CAD increases
if a person has one or more of the following: high blood pressure,
abnormal cholesterol levels, diabetes, or family history of early
heart disease. According to the American Heart Association, 16.3
million people in the United States have been diagnosed with CAD,
the most common form of heart disease. Heart disease claims more
than 600,000 lives in the United States each year. According to
estimates, significant arterial calcium is present in nearly 40% of
patients undergoing a percutaneous coronary intervention (PCI).
Significant calcium contributes to poor outcomes and higher
treatment costs in coronary interventions when traditional
therapies are used, including a significantly higher occurrence of
death and major adverse cardiac events (MACE).
About Cardiovascular Systems, Inc.Cardiovascular Systems,
Inc., based in St. Paul, Minn., is a medical device company focused
on developing and commercializing innovative solutions for treating
vascular and coronary disease. The company’s Orbital Atherectomy
Systems treat calcified and fibrotic plaque in arterial vessels
throughout the leg and heart in a few minutes of treatment time,
and address many of the limitations associated with existing
surgical, catheter and pharmacological treatment alternatives. The
U.S. FDA granted 510(k) clearance for the use of the Diamondback
Orbital Atherectomy System in peripheral arteries in August 2007.
In October 2013, the company received FDA approval for the use of
the Diamondback Orbital Atherectomy System in coronary arteries.
The Stealth 360® Peripheral Orbital Atherectomy System (OAS)
received CE Mark in October 2014. In March 2017, the company
received PMDA approval in Japan for the Diamondback 360® Coronary
OAS Micro Crown and reimbursement approval effective February 2018.
Over 450,000 of CSI’s devices have been sold to leading
institutions worldwide. For more information, visit the company’s
website at www.csi360.com.
Safe HarborCertain statements in this news release are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are provided under the
protection of the safe harbor for forward-looking statements
provided by that Act. For example, statements in this press release
regarding (i) CSI’s strategy and growth; and (ii) anticipated
revenue, gross profit, net loss and Adjusted EBITDA, are
forward-looking statements. These statements involve risks and
uncertainties that could cause results to differ materially from
those projected, including, but not limited to, regulatory
developments, clearances and approvals; approval of our products
for distribution in countries outside of the United States;
approval of products for reimbursement and the level of
reimbursement in the U.S., Japan and other foreign countries;
dependence on market growth; agreements with third parties to sell
their products; the ability of OrbusNeich to successfully launch
CSI products outside of the United States and Japan; our ability to
maintain third-party supplier relationships and renew existing
purchase agreements; our ability to maintain our relationship with
our distribution partner in Japan and with OrbusNeich; the
experience of physicians regarding the effectiveness and
reliability of the products we sell; the reluctance of physicians,
hospitals and other organizations to accept new products; the
potential for unanticipated delays in enrolling medical centers and
patients for clinical trials; actual clinical trial and study
results; the impact of competitive products and pricing;
unanticipated developments affecting our estimates regarding
expenses, future revenues and capital requirements; the difficulty
of successfully managing operating costs; our ability to manage our
sales force strategy; our actual research and development efforts
and needs; our ability to obtain and maintain intellectual property
protection for product candidates; our actual financial resources
and our ability to obtain additional financing; fluctuations in
results and expenses based on new product introductions, sales mix,
unanticipated warranty claims, and the timing of project
expenditures; our ability to manage costs; investigations or
litigation threatened or initiated against us; court rulings and
future actions by the FDA and other regulatory bodies; the effects
of hurricanes, flooding, and other natural disasters on our
business; issues relating to our saline pump recall; the impact of
federal corporate tax reform on our business, operations and
financial statements; international trade developments; shutdowns
of the U.S. federal government; general economic conditions; and
other factors detailed from time to time in CSI’s SEC reports,
including its most recent annual report on Form 10-K and subsequent
quarterly reports on Form 10-Q. CSI encourages you to consider all
of these risks, uncertainties and other factors carefully in
evaluating the forward-looking statements contained in this
release. As a result of these matters, changes in facts,
assumptions not being realized or other circumstances, CSI's actual
results may differ materially from the expected results discussed
in the forward-looking statements contained in this release. The
forward-looking statements made in this release are made only as of
the date of this release, and CSI undertakes no obligation to
update them to reflect subsequent events or circumstances.
Product Disclosures:
Peripheral ProductsThe Stealth 360® PAD System and
Diamondback 360® PAD System are percutaneous orbital atherectomy
systems indicated for use as therapy in patients with occlusive
atherosclerotic disease in peripheral arteries and stenotic
material from artificial arteriovenous dialysis fistulae. The
systems are contraindicated for use in coronary arteries, bypass
grafts, stents or where thrombus or dissections are present.
Although the incidence of adverse events is rare, potential events
that can occur with atherectomy include: pain, hypotension,
CVA/TIA, death, dissection, perforation, distal embolization,
thrombus formation, hematuria, abrupt or acute vessel closure, or
arterial spasm. See the instructions for use for detailed
information regarding the procedure, indications,
contraindications, warnings, precautions, and potential adverse
events. For further information call CSI at 1-877-274-0901 and/or
consult CSI’s website at www.csi360.com.
Coronary ProductIndications: The Diamondback 360®
Coronary Orbital Atherectomy System (OAS) is a percutaneous orbital
atherectomy system indicated to facilitate stent delivery in
patients with coronary artery disease (CAD) who are acceptable
candidates for PTCA or stenting due to de novo, severely calcified
coronary artery lesions.
Contraindications: The OAS is contraindicated when the
ViperWire® guide wire cannot pass across the coronary lesion or the
target lesion is within a bypass graft or stent. The OAS is
contraindicated when the patient is not an appropriate candidate
for bypass surgery, angioplasty, or atherectomy therapy, or has
angiographic evidence of thrombus, or has only one open vessel, or
has angiographic evidence of significant dissection at the
treatment site and for women who are pregnant or children.
Warnings/Precautions: Performing treatment in excessively
tortuous vessels or bifurcations may result in vessel damage; The
OAS was only evaluated in severely calcified lesions, A temporary
pacing lead may be necessary when treating lesions in the right
coronary and circumflex arteries; On-site surgical back-up should
be included as a clinical consideration; Use in patients with an
ejection fraction (EF) of less than 25% has not been evaluated. See
the instructions for use before performing Diamondback 360 Coronary
OAS procedures for detailed information regarding the procedure,
indications, contraindications, warnings, precautions, and
potential adverse events. For further information call CSI at
1-877-274-0901 and/or consult CSI’s website at www.csi360.com.
Caution: Federal law (USA) restricts these devices to
sale by or on the order of a physician.
Cardiovascular Systems,
Inc.Consolidated Statements of Operations(Dollars in
Thousands)(unaudited)
Three Months Ended Nine Months Ended March
31 March 31 2019 2018 2019
2018 Net revenues $ 63,311 $ 55,587 $ 179,783
$ 157,891 Cost of goods sold 12,166 9,969
34,218 28,670 Gross profit
51,145 45,618 145,565 129,221 Expenses: Selling, general and
administrative 41,356 37,796 123,705 110,722 Research and
development 9,282 7,333 23,937
20,037 Total expenses 50,638
45,129 147,642 130,759
Income (loss) from operations 507 489 (2,077 ) (1,538 ) Other
(income) and expense, net (251 ) 91
(505 ) 388 Loss before income taxes 758 398 (1,572 )
(1,926 ) Provision for income taxes 86 33
152 99 Net income (loss) $ 672
$ 365 $ (1,724 ) $ (2,025 ) Basic earnings per
share $ 0.02 $ 0.01 $ (0.05 ) $ (0.06 ) Diluted
earnings per share $ 0.02 $ 0.01 $ (0.05 ) $ (0.06 )
Basic weighted average shares outstanding 33,600,148
33,237,552 33,510,368
33,105,174 Diluted weighted average shares outstanding
34,241,432 33,641,804 33,510,368
33,105,174
Cardiovascular Systems,
Inc.Consolidated Balance Sheets(Dollars in
Thousands)(unaudited)
March 31, June 30, 2019 2018
ASSETS Current assets Cash and cash equivalents $
115,280 $ 116,260 Accounts receivable, net 34,970 31,225
Inventories 19,304 16,605 Marketable securities 456 544 Prepaid
expenses and other current assets 2,221 2,977 Total
current assets 172,231 167,611 Property and equipment, net 27,607
27,744 Patents, net 5,242 5,231 Other assets 6,149
2,766 Total assets $ 211,229 $ 203,352
LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Accounts payable $
12,396 $ 10,441 Accrued expenses 26,489 25,776 Deferred revenue
1,612 1,243 Total current liabilities 40,497 37,460
Long-term liabilities Finance obligation 21,005 21,064 Deferred
revenue 7,230 8,946 Other liabilities 884 1,412 Total
liabilities 69,616 68,882 Commitments and contingencies - - Total
stockholders' equity 141,613 134,470 Total
liabilities and stockholders' equity $ 211,229 $ 203,352
Non-GAAP Financial MeasuresTo supplement CSI's
consolidated condensed financial statements prepared in accordance
with GAAP, CSI uses a non-GAAP financial measure referred to as
"Adjusted EBITDA" in this release.
Reconciliations of this non-GAAP measure to the most comparable
U.S. GAAP measure for the respective periods can be found in the
following tables. In addition, an explanation of the manner in
which CSI's management uses this measure to conduct and evaluate
its business, the economic substance behind management's decision
to use this measure, the substantive reasons why management
believes that this measure provides useful information to
investors, the material limitations associated with the use of this
measure and the manner in which management compensates for those
limitations is included following the reconciliation table.
Adjusted EBITDA(Dollars in
Thousands)(unaudited)
Three Months Ended Nine Months Ended March
31 March 31 2019 2018 2019
2018 Net income (loss) $ 672 $ 365 $ (1,724 )
$ (2,025 ) Less: Other (income) and expense, net (251 ) 91 (505 )
388 Less: Provision for income taxes 86 33
152 99 Income (loss) from operations
507 489 (2,077 ) (1,538 ) Add: Stock-based compensation 2,674 2,140
8,600 7,880 Add: Depreciation and amortization 932
990 2,617 3,080 Adjusted EBITDA
$ 4,113 $ 3,619 $ 9,140 $ 9,422
Use and Economic Substance of Non-GAAP Financial Measures
Used by CSI and Usefulness of Such Non-GAAP Financial Measures to
InvestorsCSI uses Adjusted EBITDA as a supplemental measure of
performance and believes this measure facilitates operating
performance comparisons from period to period and company to
company by factoring out potential differences caused by
depreciation and amortization expense and non-cash charges such as
stock based compensation. CSI's management uses Adjusted EBITDA to
analyze the underlying trends in CSI's business, assess the
performance of CSI's core operations, establish operational goals
and forecasts that are used to allocate resources and evaluate
CSI's performance period over period and in relation to its
competitors' operating results. Additionally, CSI's management is
evaluated on the basis of Adjusted EBITDA when determining
achievement of their incentive compensation performance
targets.
CSI believes that presenting Adjusted EBITDA provides investors
greater transparency to the information used by CSI's management
for its financial and operational decision-making and allows
investors to see CSI's results "through the eyes" of management.
CSI also believes that providing this information better enables
CSI's investors to understand CSI's operating performance and
evaluate the methodology used by CSI's management to evaluate and
measure such performance.
The following is an explanation of each of the items that
management excluded from Adjusted EBITDA and the reasons for
excluding each of these individual items:
-- Stock-based compensation. CSI excludes stock-based
compensation expense from its non-GAAP financial measures primarily
because such expense, while constituting an ongoing and
recurring expense, is not an expense that requires cash
settlement. CSI's management also believes that excluding this item
from CSI's non-GAAP results is useful to investors to understand
the application of stock-based compensation guidance and its impact
on CSI's operational performance, liquidity and its ability to make
additional investments in the company, and it allows for greater
transparency to certain line items in CSI's financial
statements.
-- Depreciation and amortization expense. CSI excludes
depreciation and amortization expense from its non-GAAP financial
measures primarily because such expenses, while constituting
ongoing and recurring expenses, are not expenses that require cash
settlement and are not used by CSI's management to assess the core
profitability of CSI's business operations. CSI's management also
believes that excluding these items from CSI's non-GAAP results is
useful to investors to understand CSI's operational performance,
liquidity and its ability to make additional investments in the
company.
Material Limitations Associated with the Use of Non-GAAP
Financial Measures and Manner in which CSI Compensates for these
Limitations
Non-GAAP financial measures have limitations as analytical tools
and should not be considered in isolation or as a substitute for
CSI's financial results prepared in accordance with GAAP. Some of
the limitations associated with CSI's use of these non-GAAP
financial measures are:
-- Items such as stock-based compensation do not directly affect
CSI's cash flow position; however, such items reflect economic
costs to CSI and are not reflected in CSI's "Adjusted EBITDA" and
therefore these non-GAAP measures do not reflect the full economic
effect of these items.
-- Non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles and therefore
other companies may calculate similarly titled non-GAAP financial
measures differently than CSI, limiting the usefulness of those
measures for comparative purposes.
-- CSI's management exercises judgment in determining which
types of charges or other items should be excluded from the
non-GAAP financial measures CSI uses. CSI compensates for these
limitations by relying primarily upon its GAAP results and using
non-GAAP financial measures only supplementally. CSI provides full
disclosure of each non-GAAP financial measure.
-- CSI uses and detailed reconciliations of each non-GAAP
measure to its most directly comparable GAAP measure. CSI
encourages investors to review these reconciliations. CSI qualifies
its use of non-GAAP financial measures with cautionary statements
as set forth above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190501005778/en/
Cardiovascular Systems, Inc.Jack Nielsen(651)
202-4919j.nielsen@csi360.com
PadillaMatt Sullivan(612)
455-1709matt.sullivan@padillaco.com
Cardiovascular Systems (NASDAQ:CSII)
Historical Stock Chart
From Mar 2024 to Apr 2024
Cardiovascular Systems (NASDAQ:CSII)
Historical Stock Chart
From Apr 2023 to Apr 2024