Surmodics, Inc. (Nasdaq: SRDX), a leading provider of medical
device and in vitro diagnostic technologies to the healthcare
industry, today reported financial results for its third quarter
ended June 30, 2024.
Third Quarter Fiscal 2024 Financial Summary
- Total Revenue of $30.3 million, compared to $52.5 million in
the prior-year period which included $24.6 million in license fee
revenue recognized upon receipt of a $27.0 million milestone
payment associated with obtaining FDA premarket approval of the
SurVeil™ drug-coated balloon (“DCB”)
- Total Revenue excluding SurVeil DCB license fee revenue(1) of
$29.2 million, an increase of 10% year-over-year
- GAAP net loss of $(7.6) million, compared to net income of $7.3
million in the prior-year period
- Adjusted EBITDA(2) of $1.6 million, compared to $24.6 million
in the prior-year period
Third Quarter and Recent Business Highlights
- On May 29, 2024, Surmodics announced it had entered into a
definitive agreement to be acquired by GTCR for $43.00 per share in
cash, representing an approximate equity value of $627 million,
subject to customary closing conditions, including approval by
Surmodics’ shareholders and required regulatory approval. A special
meeting of shareholders to vote on a proposal to approve the merger
agreement and related matters has been scheduled for August 13,
2024.
- On June 10, 2024, Surmodics announced it has been awarded a
group purchasing agreement for thrombectomy products with Premier,
Inc. (“Premier”), which is expected to expand national market reach
for the company’s endovascular thrombectomy solutions. Effective
June 1, 2024, the new agreement allows Premier members, at their
discretion, to take advantage of special pricing and terms
pre-negotiated by Premier for Surmodics’ Pounce™ and Pounce™ Venous
Thrombectomy Systems.
“Our team’s focus and execution in the third quarter enabled us
to deliver total revenue results consistent with the expectations
shared on our most recent earnings call, benefiting from strength
across multiple areas of our business,” said Gary Maharaj,
President and CEO of Surmodics, Inc. “Specifically, we saw strong
contributions from growth in both Medical Device product revenue –
driven primarily by demand for our SurVeil DCB and Pounce
thrombectomy products – and performance coating royalties and
license fees, along with broad-based growth in sales of our In
Vitro Diagnostics products as well.”
Third Quarter Fiscal 2024 Financial Results
Three Months Ended June
30,
Increase (Decrease)
2024
2023
$
%
Revenue:
Medical Device
$
23,383
$
46,014
$
(22,631
)
(49
)%
In Vitro Diagnostics
6,958
6,469
489
8
%
Total revenue
$
30,341
$
52,483
$
(22,142
)
(42
)%
Total revenue decreased $22.1 million, or 42%, to $30.3 million,
compared to $52.5 million in the third quarter of fiscal 2023.
Excluding SurVeil DCB license fee revenue,(1) total revenue
increased $2.6 million, or 10%, to $29.2 million, compared to $26.6
million in the third quarter of fiscal 2023.
Medical Device revenue decreased $22.6 million, or 49%, to $23.4
million, compared to $46.0 million in the third quarter of fiscal
2023. Medical Device revenue included a total of $1.1 million in
SurVeil DCB license fee revenue, compared to $25.9 million in the
third quarter of fiscal 2023 – of which $24.6 million was revenue
recognized on the $27.0 million milestone payment received in the
period from Abbott Vascular, Inc. (“Abbott”) associated with
obtaining FDA approval of the SurVeil DCB. Excluding SurVeil DCB
license fee revenue,(1) Medical Device revenue increased $2.1
million, or 10%, to $22.2 million, compared to $20.1 million in the
third quarter of fiscal 2023, driven primarily by product sales and
performance coating royalties and license fee revenue. Medical
Device product sales increased $1.4 million, or 15%, to $10.7
million, compared to $9.3 million in the third quarter of fiscal
2023, driven primarily by commercial shipments of the SurVeil DCB
to Abbott, the company’s exclusive distribution partner for the
product, and growth in sales of the Pounce thrombectomy device
platform. Medical Device performance coating royalties and license
fee revenue increased $1.0 million, or 13%, to $9.3 million,
compared to $8.3 million in the third quarter of fiscal 2023,
driven primarily by continued growth in customer utilization of
Surmodics’ Serene™ hydrophilic coating. In Vitro Diagnostics
(“IVD”) revenue increased $0.5 million, or 8%, to $7.0 million,
compared to $6.5 million in the third quarter of fiscal 2023,
driven by broad-based product sales growth.
Product gross profit(3) increased $0.4 million, or 4%, to $9.1
million, compared to $8.7 million in the third quarter of fiscal
2023. Product gross margin(3) was 51.9%, compared to 55.8% in the
third quarter of fiscal 2023. The decrease in product gross margin
was primarily driven by increased sales of SurVeil DCB, Pounce
thrombectomy and Sublime™ radial access products as a proportion of
total product sales, as these devices were not at scale, and
product gross margins reflected the associated under-absorption and
production inefficiencies, including expiration of inventory.
Operating costs and expenses, excluding product costs, increased
$3.1 million, or 13%, to $27.3 million, compared to $24.2 million
in the third quarter of fiscal 2023. The increase was primarily
driven by $2.9 million of merger-related charges incurred in the
third quarter of fiscal 2024 associated with the pending
acquisition of Surmodics by GTCR, which were reported in selling,
general and administrative expense. In addition, the third quarter
of fiscal 2023 included a $0.8 million gain from the fair value
adjustment of acquisition-related contingent consideration. These
increases were offset, in part, by lower research and development
expense, which decreased $1.5 million year-over-year primarily due
to the transition of the SurVeil DCB to commercialization, as well
as the timing of development and commercialization of Surmodics’
thrombectomy devices.
GAAP net loss was $(7.6) million, or $(0.53) per diluted share,
compared to GAAP net income of $7.3 million, or $0.52 per diluted
share in the third quarter of fiscal 2023. Non-GAAP net loss(4) was
$(3.9) million, or $(0.27) per diluted share,(4) compared to
Non-GAAP net income(4) of $7.3 million, or $0.52 per diluted
share(4) in the third quarter of fiscal 2023.
Adjusted EBITDA(2) was $1.6 million, compared to Adjusted
EBITDA(2) of $24.6 million in the third quarter of fiscal 2023.
Balance Sheet Summary
As of June 30, 2024, Surmodics reported $38.2 million in cash
and investments, $5.0 million in outstanding borrowings on its
revolving credit facility, and $25.0 million in outstanding
borrowings on its term loan facility. The company had access to
approximately $65.0 million in additional debt capital as of June
30, 2024 under its revolving credit and term loan facilities.
Surmodics reported $2.0 million in cash used in operating
activities and $1.0 million in capital expenditures in the third
quarter of fiscal 2024. In the third quarter of fiscal 2024, cash
and investments decreased by $2.8 million, which consisted of the
change in the combined balance of cash and cash equivalents and
investments in available-for-sale securities from March 31, 2024 to
June 30, 2024.
Fiscal Year 2024 Financial Guidance
Surmodics is suspending its previously issued financial guidance
for fiscal 2024 in light of the pending acquisition by GTCR.
Conference Call
Given the pending acquisition by GTCR, Surmodics will not be
hosting a live webcast and conference call to discuss third quarter
of fiscal 2024 financial results and accomplishments.
About the Pending Acquisition of Surmodics by GTCR
On May 29, 2024, Surmodics announced it had entered into a
definitive agreement to be acquired by GTCR, a leading private
equity firm with a long track record of investment expertise across
healthcare and healthcare technology. Under the terms of the
agreement, affiliates of GTCR will acquire all outstanding shares
of Surmodics (the “Merger”). Surmodics shareholders will receive
$43.00 per share in cash, for a total equity valuation of
approximately $627 million. The per-share acquisition price
represents a 41.1% premium to Surmodics’ 30-trading day
volume-weighted average closing price through May 28, 2024.
Surmodics’ Board of Directors has unanimously approved the
transaction and resolved to recommend that shareholders vote in
favor of the transaction. The transaction remains subject to
customary closing conditions, including approval by Surmodics
shareholders and required regulatory approval. It will be financed
through a combination of committed equity from funds affiliated
with GTCR and committed debt financing. Upon completion of the
transaction, Surmodics will be a privately held company and its
common stock will no longer be listed on The Nasdaq Stock
Exchange.
About Surmodics, Inc.
Surmodics, Inc. is a leading provider of performance coating
technologies for intravascular medical devices and chemical and
biological components for in vitro diagnostic immunoassay tests and
microarrays. Surmodics also develops and commercializes highly
differentiated vascular intervention medical devices that are
designed to address unmet clinical needs and engineered to the most
demanding requirements. This key growth strategy leverages the
combination of the company’s expertise in proprietary surface
modification and drug-delivery coating technologies, along with its
device design, development and manufacturing capabilities. The
company’s mission is to improve the detection and treatment of
disease. Surmodics is headquartered in Eden Prairie, Minnesota. For
more information, visit www.surmodics.com. The content of
Surmodics’ website is not part of this press release or part of any
filings that the company makes with the SEC.
Safe Harbor for Forward-looking Statements
This press release, and disclosures related to it, contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements that are not
historical or current facts, including statements regarding: the
proposed Merger, including anticipated timing of the same; future
success; our focus on disciplined expense management and
optimization of working capital; our access to additional
borrowings under our existing credit agreement; our ability to
capitalize on the key near-term growth catalysts in our vascular
interventions portfolio by facilitating the adoption and
utilization of SurVeil DCB products, Pounce thrombectomy products,
and Sublime radial access products; the potential for Abbott’s
sales team to use the results of the TRANSCEND trial with potential
SurVeil DCB physician users; Abbott’s progress in the market as
they work to facilitate the adoption of the SurVeil DCB; our
ability to obtain long-term growth by developing and introducing
new products and line extensions to enhance our existing Pounce,
Sublime, and medical device performance coatings portfolios; the
likely key drivers of adoption of the Pounce Venous Thrombectomy
System; whether we will continue to enhance and strengthen our
position as an industry-leading provider of performance coating
technologies; our ability to obtain durable revenue growth and cash
flow generation across our core performance coatings and IVD
products; being well-capitalized to support future growth
objectives; being well positioned to achieve and deliver strong,
sustained revenue growth; and delivering sustained improvements in
our underlying profitability profile, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties, and important factors could cause actual results to
differ materially from those anticipated, including, without
limitation: (1) risks related to the consummation of the proposed
Merger, including the risks that (a) the Merger may not be
consummated within the anticipated time period, or at all, (b) the
parties may fail to obtain shareholder approval of the merger
agreement for the Merger (the “Merger Agreement”), (c) the parties
may fail to secure the termination or expiration of any waiting
period applicable under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, (d) other conditions to the
consummation of the Merger under the Merger Agreement may not be
satisfied, (e) all or part of GTCR’s financing may not become
available, and (f) the significant limitations on remedies
contained in the Merger Agreement may limit or entirely prevent the
company from specifically enforcing the buyer’s obligations under
the Merger Agreement or recovering damages for any breach by the
buyer; (2) the effects that any termination of the Merger Agreement
may have on the company or its business, including the risks that
(a) the company’s stock price may decline significantly if the
Merger is not completed, (b) the Merger Agreement may be terminated
in circumstances requiring the company to pay the buyer a
termination fee of $20,380,000, or (c) the circumstances of the
termination, including the possible imposition of a 12-month tail
period during which the termination fee could be payable upon
certain subsequent transactions, may have a chilling effect on
alternatives to the Merger; (3) the effects that the announcement
or pendency of the Merger may have on the company and its business,
including the risks that as a result (a) the company’s business,
operating results or stock price may suffer, (b) the company’s
current plans and operations may be disrupted, (c) the company’s
ability to retain or recruit key employees may be adversely
affected, (d) the company’s business relationships (including,
customers, franchisees and suppliers) may be adversely affected, or
(e) the company’s management’s or employees’ attention may be
diverted from other important matters; (4) the effect of
limitations that the Merger Agreement places on the company’s
ability to operate its business, return capital to shareholders or
engage in alternative transactions; (5) the nature, cost and
outcome of pending and future litigation and other legal
proceedings, including proceedings related to the Merger and
instituted against the company and others; (6) the risk that the
Merger and related transactions may involve unexpected costs,
liabilities or delays; (7) our ability to successfully
commercialize our SurVeil DCB (including realization of the full
potential benefits of our agreement with Abbott), Sundance™ DCB,
and other proprietary products; (8) 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; (9) possible adverse
market conditions and possible adverse impacts on our cash flows;
(10) our ability to successfully and profitably produce and
commercialize our vascular intervention products; (11) supply chain
constraints; (12) whether our operating expenses are effective in
generating profitable revenues; (13) 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, 2023 and subsequent SEC
filings. These reports are available in the Investors section of
our website at https://surmodics.gcs-web.com and at the SEC website
at www.sec.gov. Forward-looking statements speak only as of the
date they are made, and we undertake no obligation to update them
in light of new information or future events.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
U.S. generally accepted accounting principles, or GAAP, Surmodics
is reporting non-GAAP financial results including total revenue
excluding SurVeil DCB license fee revenue, Medical Device revenue
excluding SurVeil DCB license fee revenue, EBITDA and Adjusted
EBITDA, non-GAAP operating (loss) income, non-GAAP operating (loss)
income percentage, non-GAAP (loss) income before income taxes,
non-GAAP net (loss) income, and non-GAAP (loss) income per diluted
share. We believe that these non-GAAP measures, when read in
conjunction with the company’s GAAP financial statements, provide
meaningful insight into our operating performance excluding certain
event-specific matters, and provide an alternative perspective of
our results of operations. We use non-GAAP measures, including
those set forth in this release, to assess our operating
performance and to determine payouts under our executive
compensation programs. We believe that presentation of certain
non-GAAP measures allows investors to review our results of
operations from the same perspective as management and our board of
directors and facilitates comparisons of our current results of
operations. The method we use to produce non-GAAP results is not in
accordance with GAAP and may differ from the methods used by other
companies. Non-GAAP results should not be regarded as a substitute
for corresponding GAAP measures but instead should be utilized as a
supplemental measure of operating performance in evaluating our
business. Non-GAAP measures do have limitations in that they do not
reflect certain items that may have a material impact on our
reported financial results. As such, these non-GAAP measures should
be viewed in conjunction with both our financial statements
prepared in accordance with GAAP and the reconciliation of the
supplemental non-GAAP financial measures to the comparable GAAP
results provided for the specific periods presented, which are
attached to this release.
Surmodics, Inc. and
Subsidiaries Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended June
30,
Nine Months Ended June
30,
2024
2023
2024
2023
Revenue:
Product sales
$
17,562
$
15,667
$
54,488
$
45,251
Royalties and license fees
10,458
34,153
31,048
52,347
Research, development and other
2,321
2,663
7,315
7,016
Total revenue
30,341
52,483
92,851
104,614
Operating costs and expenses:
Product costs
8,448
6,921
24,352
17,926
Research and development
9,765
11,232
28,658
36,899
Selling, general and administrative
16,627
12,874
42,257
39,077
Acquired intangible asset amortization
870
879
2,616
2,659
Restructuring expense
—
—
—
1,282
Contingent consideration gain
—
(835
)
—
(829
)
Total operating costs and expenses
35,710
31,071
97,883
97,014
Operating (loss) income
(5,369
)
21,412
(5,032
)
7,600
Other expense, net
(442
)
(763
)
(1,337
)
(2,324
)
(Loss) income before income taxes
(5,811
)
20,649
(6,369
)
5,276
Income tax expense
(1,743
)
(13,303
)
(1,724
)
(13,506
)
Net (loss) income
$
(7,554
)
$
7,346
$
(8,093
)
$
(8,230
)
Basic net (loss) income per share
$
(0.53
)
$
0.52
$
(0.57
)
$
(0.59
)
Diluted net (loss) income per share
$
(0.53
)
$
0.52
$
(0.57
)
$
(0.59
)
Weighted average number of shares
outstanding:
Basic
14,170
14,050
14,141
14,020
Diluted
14,170
14,072
14,141
14,020
Surmodics, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets (in
thousands)
June 30,
September 30,
2024
2023
Assets
(Unaudited)
(See Note)
Current Assets:
Cash and cash equivalents
$
24,301
$
41,419
Available-for-sale securities
13,874
3,933
Accounts receivable, net
13,390
10,850
Contract assets, current
10,021
7,796
Inventories
15,405
14,839
Prepaids and other
3,365
7,854
Total Current Assets
80,356
86,691
Property and equipment, net
25,319
26,026
Intangible assets, net
23,702
26,206
Goodwill
43,355
42,946
Other assets
4,681
3,864
Total Assets
$
177,413
$
185,733
Liabilities and Stockholders’
Equity
Current Liabilities:
Deferred revenue
3,681
4,378
Other current liabilities
16,515
19,576
Total Current Liabilities
20,196
23,954
Long-term debt, net
29,517
29,405
Deferred revenue
—
2,400
Other long-term liabilities
9,556
10,064
Total Liabilities
59,269
65,823
Total Stockholders’ Equity
118,144
119,910
Total Liabilities and Stockholders’
Equity
$
177,413
$
185,733
Note: Derived from audited financial
statements as of the date indicated.
Surmodics, Inc. and
Subsidiaries Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Nine Months Ended June
30,
2024
2023
Operating Activities:
Net loss
$
(8,093
)
$
(8,230
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
6,555
6,365
Stock-based compensation
6,138
5,662
Deferred taxes
(262
)
(187
)
Other
394
217
Change in operating assets and
liabilities:
Accounts receivable and contract
assets
(5,533
)
(1,825
)
Inventories
(566
)
(2,790
)
Prepaids and other
3,965
(961
)
Accounts payable
185
(669
)
Accrued liabilities
(3,249
)
(2,474
)
Income taxes
153
15,583
Deferred revenue
(3,097
)
(1,427
)
Net cash (used in) provided by operating
activities
(3,410
)
9,264
Investing Activities:
Purchases of property and equipment
(2,950
)
(2,170
)
Purchases of available-for-sale
securities
(25,445
)
—
Maturities of available-for-sale
securities
16,000
—
Net cash used in investing activities
(12,395
)
(2,170
)
Financing Activities:
Payments of short-term borrowings
—
(10,000
)
Proceeds from issuance of long-term
debt
—
29,664
Payments of debt issuance costs
—
(614
)
Issuance of common stock
663
803
Payments for taxes related to net share
settlement of equity awards
(1,120
)
(888
)
Payments for acquisition of in-process
research and development
(931
)
(978
)
Net cash (used in) provided by financing
activities
(1,388
)
17,987
Effect of exchange rate changes on cash
and cash equivalents
75
500
Net change in cash and cash
equivalents
(17,118
)
25,581
Cash and Cash Equivalents:
Beginning of period
41,419
18,998
End of period
$
24,301
$
44,579
Surmodics, Inc. and
Subsidiaries Supplemental Revenue Information (in
thousands)
(Unaudited)
Three Months Ended June
30,
Increase (Decrease)
2024
2023
$
%
Medical Device Revenue
Product sales
$
10,726
$
9,299
$
1,427
15
%
Royalties & license fees – performance
coatings
9,324
8,286
1,038
13
%
License fees – SurVeil DCB(1)
1,134
25,867
(24,733
)
(96
)%
R&D and other
2,199
2,562
(363
)
(14
)%
Medical Device revenue
23,383
46,014
(22,631
)
(49
)%
In Vitro Diagnostics Revenue
Product sales
6,836
6,368
468
7
%
R&D and other
122
101
21
21
%
In Vitro Diagnostics revenue
6,958
6,469
489
8
%
Total Revenue
$
30,341
$
52,483
$
(22,142
)
(42
)%
Medical Device Revenue, excluding
SurVeil DCB license fees(1)
$
22,249
$
20,147
$
2,102
10
%
Total Revenue, excluding SurVeil DCB
license fees(1)
$
29,207
$
26,616
$
2,591
10
%
Nine Months Ended June
30,
Increase (Decrease)
2024
2023
$
%
Medical Device Revenue
Product sales
$
33,776
$
25,593
$
8,183
32
%
Royalties & license fees – performance
coatings
27,855
23,853
4,002
17
%
License fees – SurVeil DCB(1)
3,193
28,494
(25,301
)
(89
)%
R&D and other
6,930
6,799
131
2
%
Medical Device revenue
71,754
84,739
(12,985
)
(15
)%
In Vitro Diagnostics Revenue
Product sales
20,712
19,658
1,054
5
%
R&D and other
385
217
168
77
%
In Vitro Diagnostics revenue
21,097
19,875
1,222
6
%
Total Revenue
$
92,851
$
104,614
$
(11,763
)
(11
)%
Medical Device Revenue, excluding
SurVeil DCB license fees(1)
$
68,561
$
56,245
$
12,316
22
%
Total Revenue, excluding SurVeil DCB
license fees(1)
$
89,658
$
76,120
$
13,538
18
%
Surmodics, Inc. and
Subsidiaries Supplemental Segment Information (in
thousands)
(Unaudited)
Three Months Ended June
30,
Increase (Decrease)
2024
2023
$
Operating (Loss) Income:
Medical Device
$
(2,288
)
$
21,777
$
(24,065
)
In Vitro Diagnostics
3,153
2,866
287
Total segment operating income
865
24,643
(23,778
)
Corporate
(6,234
)
(3,231
)
(3,003
)
Total Operating (Loss) Income
$
(5,369
)
$
21,412
$
(26,781
)
Nine Months Ended June
30,
Increase (Decrease)
2024
2023
$
Operating (Loss) Income:
Medical Device
$
(2,210
)
$
7,483
$
(9,693
)
In Vitro Diagnostics
9,633
9,450
183
Total segment operating income
7,423
16,933
(9,510
)
Corporate
(12,455
)
(9,333
)
(3,122
)
Total Operating (Loss) Income
$
(5,032
)
$
7,600
$
(12,632
)
Surmodics, Inc. and
Subsidiaries GAAP to Non-GAAP Reconciliation: EBITDA and Adjusted
EBITDA (in thousands)
(Unaudited)
Three Months Ended June
30,
Increase (Decrease)
2024
2023
$
Net (loss) income
$
(7,554
)
$
7,346
$
(14,900
)
Income tax expense
1,743
13,303
(11,560
)
Depreciation and amortization
2,126
2,151
(25
)
Interest expense, net
879
884
(5
)
Investment income, net
(488
)
(182
)
(306
)
EBITDA
(3,294
)
23,502
(26,796
)
Adjustments:
Stock-based compensation expense
2,044
1,915
129
Merger-related charges(5)
2,864
—
2,864
Contingent consideration fair value
adjustment(6)
—
(829
)
829
Adjusted EBITDA
$
1,614
$
24,588
$
(22,974
)
Nine Months Ended June
30,
Increase (Decrease)
2024
2023
$
Net loss
$
(8,093
)
$
(8,230
)
$
137
Income tax expense
1,724
13,506
(11,782
)
Depreciation and amortization
6,555
6,365
190
Interest expense, net
2,656
2,594
62
Investment income, net
(1,487
)
(531
)
(956
)
EBITDA
1,355
13,704
(12,349
)
Adjustments:
Stock-based compensation expense
6,138
5,662
476
Merger-related charges(5)
2,864
—
2,864
Restructuring expense(7)
—
1,282
(1,282
)
Contingent consideration fair value
adjustment(6)
—
(829
)
829
Adjusted EBITDA
$
10,357
$
19,819
$
(9,462
)
Surmodics, Inc. and
Subsidiaries
GAAP to Non-GAAP
Reconciliation: Net (Loss) Income and Diluted EPS
(in thousands, except per share
data)
(Unaudited)
Three Months Ended June 30,
2024
Operating Loss
Loss Before Income
Taxes
Net Loss(9)
Diluted EPS
GAAP
$
(5,369
)
(17.7
)%
$
(5,811
)
$
(7,554
)
$
(0.53
)
Adjustments:
Amortization of acquired intangible
assets(8)
870
2.9
%
870
810
0.06
Merger-related charges(5)
2,864
9.4
%
2,864
2,864
0.20
Non-GAAP
$
(1,635
)
(5.4
)%
$
(2,077
)
$
(3,880
)
$
(0.27
)
Diluted weighted average shares
outstanding(10)
14,170
Three Months Ended June 30,
2023
Operating Income
Income Before Income
Taxes
Net Income(9)
Diluted EPS
GAAP
$
21,412
40.8
%
$
20,649
$
7,346
$
0.52
Adjustments:
Amortization of acquired intangible
assets(8)
879
1.7
%
879
813
0.06
Contingent consideration fair value
adjustment(6)
(829
)
(1.6
)%
(829
)
(829
)
(0.06
)
Non-GAAP
$
21,462
40.9
%
$
20,699
$
7,330
$
0.52
Diluted weighted average shares
outstanding(10)
14,072
Nine Months Ended June 30,
2024
Operating (Loss)
Income
Loss Before Income
Taxes
Net Loss(9)
Diluted EPS
GAAP
$
(5,032
)
(5.4
)%
$
(6,369
)
$
(8,093
)
$
(0.57
)
Adjustments:
Amortization of acquired intangible
assets(8)
2,616
2.8
%
2,616
2,420
0.17
Merger-related charges(5)
2,864
3.1
%
2,864
2,864
0.20
Non-GAAP
$
448
0.5
%
$
(889
)
$
(2,809
)
$
(0.20
)
Diluted weighted average shares
outstanding(10)
14,141
Nine Months Ended June 30,
2023
Operating Income
Income Before Income
Taxes
Net Loss(9)
Diluted EPS
GAAP
$
7,600
7.3
%
$
5,276
$
(8,230
)
$
(0.59
)
Adjustments:
Amortization of acquired intangible
assets(8)
2,659
2.5
%
2,659
2,467
0.18
Restructuring expense(7)
1,282
1.2
%
1,282
1,282
0.09
Contingent consideration fair value
adjustment(6)
(829
)
(0.8
)%
(829
)
(829
)
(0.06
)
Non-GAAP
$
10,712
10.2
%
$
8,388
$
(5,310
)
$
(0.38
)
Diluted weighted average shares
outstanding(10)
14,020
(1)
SurVeil DCB license fee revenue
represents revenue recognition on milestone payments received under
the company’s Development and Distribution Agreement with Abbott
(“Abbott Agreement”). For further details, refer to Supplemental Revenue Information.
(2)
For the calculation of Adjusted
EBITDA, refer to GAAP to Non-GAAP
Reconciliation: EBITDA and Adjusted EBITDA.
(3)
Product gross profit equals
product sales less product costs, as reported on the condensed
consolidated statements of operations. Product gross margin equals
product gross profit as a percentage of product sales.
(4)
For the calculation of Non-GAAP
net (loss) income and Non-GAAP (loss) income per diluted share
(also referred to as Non-GAAP diluted EPS), refer to GAAP to Non-GAAP Reconciliation: Net (Loss) Income and
Diluted EPS.
(5)
Merger-related charges consisted
of expenses specifically associated with the proposed acquisition
of Surmodics by GTCR, which were reported in selling, general and
administrative expense on the condensed consolidated statements of
operations. Merger-related charges were not tax deductible.
(6)
Contingent consideration fair
value adjustment represented accounting adjustments to state
acquisition-related contingent consideration liabilities at their
estimated fair value as of the period end date related to changes
in the timing and/or probability of achieving milestones.
(7)
Restructuring expense consisted
of severance and related costs specifically associated with a
workforce restructuring implemented in the second quarter of fiscal
2023.
(8)
Represents amortization of
business acquisition-related intangible assets and associated tax
impact. A significant portion of the business acquisition-related
amortization is not tax deductible.
(9)
Net (loss) income includes the
effect of GAAP to Non-GAAP adjustments on income tax expense,
taking into account deferred taxes net of valuation allowances, as
well as non-deductible items. Income tax impacts were estimated
using the applicable statutory rate (21% in the U.S. and 12.5% in
Ireland).
(10)
Diluted weighted average shares
outstanding used in the calculation of EPS was the same for GAAP
EPS and Non-GAAP EPS for the three and nine month periods ended
June 30, 2024 and 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731409750/en/
Surmodics Investor Inquiries Jack Powell, Investor Relations
ir@surmodics.com
SurModics (NASDAQ:SRDX)
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