Intricon Reports Second Quarter 2021 Results
Second Quarter Highlights:
- Revenue of
$30.2 million , a 28% increase compared to the prior year period - Gross profit margin of 26.1%, compared to 28.0% in the prior year period
- GAAP net loss of
$1.2 million versus net loss of$2.3 million in the prior year period - Non-GAAP adjusted net income of
$2.1 million versus$2.1 million in the prior year period - Cash and investment securities of
$32.9 million as ofJune 30, 2021 - Hired
David Liebl as Vice President of R&D onAugust 9, 2021
“Our second quarter results were driven by outperformance across our business, as we saw a strong resurgence in demand, particularly in our diabetes and hearing health markets. We were pleased to see the initial success and subsequent expansion of the pilot program with HearX, a partnership that places our hardware and firmware in hearing aids sold over-the-counter (OTC) in select Walgreen's stores,” said
“Despite a challenging environment, we have made significant progress in the transformation and expansion of our business in the markets we serve, while at the same time, taking steps to build our pipeline and diversify our customer base. We’ve also made great progress in adding to our leadership team, giving me the confidence that we are in the best position to date to leverage our core competencies in high growth markets,” Longval concluded.
Second Quarter 2021 Financial Results
Revenue
Net revenue for the second quarter 2021 increased 28% to
Diabetes revenue increased 13% to
Interventional Catheter revenue increased 266% to
Surgical Navigation revenue was
Hearing Health revenue increased 32% to
Gross Profit Margin and Operating Expenses
Gross profit margin in the second quarter of 2021 was 26.1%, compared to 28.0% in the prior-year second quarter. The lower margin was due to both an increase in direct labor costs and temporary Q2 2020 cost reductions as part of the company’s COVID response.
Operating expenses for the second quarter were
GAAP Net Income
The company posted GAAP net loss of
Non-GAAP Income
The company posted non-GAAP adjusted net income of
Guidance
Conference Call
Use of non-GAAP Adjusted Financial Measures
This press release contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the
- Adjusted net income
- Adjusted net income per diluted share
These non-GAAP financial measures reflect adjustments for expenses and gains that the company believes do not reflect the company’s core operating performance. The company has presented these non-GAAP financial measures because the company believes this presentation, when reconciled to the corresponding GAAP measures, provides useful information to investors in evaluating the company’s operational performance. Management uses these non-GAAP measures internally to evaluate our performance and in making financial, operational and planning decisions, including with respect to incentive compensation. The company believes that the presentation of these measures provides investors with greater transparency with respect to the company’s results of operations and that these measures are useful for period-to-period comparison of results and trends. The company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in comparing the company’s financial results with the financial results of other companies.
The company periodically reassesses the components of non-GAAP adjustments for changes in how the company evaluates Intricon’s performance, changes in how the company makes financial and operational decisions, and considers the use of these measures by Intricon’s competitors and peers to ensure the adjustments are still relevant and meaningful.
Non-GAAP financial measures should not be used as a substitute for GAAP measures, or considered in isolation, for the purpose of analyzing our operating performance. The presentation of these non-GAAP financial measures should not be construed as an inference that future results will not be affected by similar items.
Forward-Looking Statements
Statements made in this release and in Intricon’s other public filings and releases that are not historical facts or that include forward-looking terminology, including estimates of future results, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be affected by known and unknown risks, uncertainties and other factors that are beyond Intricon’s control, including without limitation, the impacts of the COVID-19 pandemic and measures taken in response, and may cause Intricon’s actual results, performance or achievements to differ materially from the results, performance and achievements expressed or implied in the forward-looking statements. These risks, uncertainties and other factors are detailed from time to time in the company’s filings with the
About Intricon Corporation
Investor Contact
(415) 937-5404
investorrelations@intricon.com
MARKET REVENUE
(Unaudited)
SECOND QUARTER | YEAR TO DATE | |||||||||||||||||
($ in 000's) | 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||
Diabetes | $ | 15,247 | $ | 13,521 | 12.8 | % | 33,611 | 27,051 | 24.3 | % | ||||||||
Interventional Catheters | 4,198 | 1,146 | 266.3 | % | 8,000 | 1,146 | 598.1 | % | ||||||||||
Other Medical | 3,510 | 3,451 | 1.7 | % | 6,468 | 6,279 | 3.0 | % | ||||||||||
Hearing Health Value Based DTEC | 950 | 1,387 | -31.5 | % | 1,887 | 2,560 | -26.3 | % | ||||||||||
Hearing Health Value Based ITEC | 2,570 | 1,365 | 88.3 | % | 4,555 | 2,109 | 116.0 | % | ||||||||||
Hearing Health Legacy OEM | 2,888 | 1,721 | 67.8 | % | 5,625 | 3,685 | 52.6 | % | ||||||||||
852 | 1,011 | -15.7 | % | 1,837 | 2,275 | -19.3 | % | |||||||||||
Total | $ | 30,215 | $ | 23,602 | 28.0 | % | $ | 61,983 | $ | 45,105 | 37.4 | % |
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Three Months Ended | Six Months Ended | ||||||||||||||
(unaudited) | |||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue, net | $ | 30,215 | $ | 23,602 | $ | 61,983 | $ | 45,105 | |||||||
Cost of goods sold | 22,343 | 16,996 | 45,901 | 33,927 | |||||||||||
Gross profit | 7,872 | 6,606 | 16,082 | 11,178 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 2,021 | 1,680 | 4,003 | 3,673 | |||||||||||
General and administrative | 4,070 | 4,603 | 8,049 | 8,019 | |||||||||||
Research and development | 1,309 | 1,209 | 2,602 | 2,410 | |||||||||||
Other operating expenses | 1,415 | - | 1,523 | - | |||||||||||
Restructuring charges | - | 1,171 | - | 1,171 | |||||||||||
Acquisition costs | - | 493 | - | 493 | |||||||||||
Total operating expenses | 8,815 | 9,156 | 16,177 | 15,766 | |||||||||||
Operating loss | (943 | ) | (2,550 | ) | (95 | ) | (4,588 | ) | |||||||
Interest (expense) income, net | (14 | ) | 97 | (23 | ) | 281 | |||||||||
Other (expense) income, net | (91 | ) | 208 | (168 | ) | 101 | |||||||||
Income (loss) before income taxes | (1,048 | ) | (2,245 | ) | (286 | ) | (4,206 | ) | |||||||
Income tax expense | 80 | 29 | 170 | 47 | |||||||||||
Net loss | (1,128 | ) | (2,274 | ) | (456 | ) | (4,253 | ) | |||||||
Less: Income allocated to non-controlling interest | 51 | 7 | 9 | 7 | |||||||||||
Net loss attributable to |
$ | (1,179 | ) | $ | (2,281 | ) | $ | (465 | ) | $ | (4,260 | ) | |||
Loss per share attributable to |
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Basic | $ | (0.13 | ) | $ | (0.26 | ) | $ | (0.05 | ) | $ | (0.48 | ) | |||
Diluted | $ | (0.13 | ) | $ | (0.26 | ) | $ | (0.05 | ) | $ | (0.48 | ) | |||
Average shares outstanding: | |||||||||||||||
Basic | 9,074 | 8,881 | 9,034 | 8,847 | |||||||||||
Diluted | 9,074 | 8,881 | 9,034 | 8,847 |
CONSOLIDATED BALANCE SHEET
(In Thousands, Except Per Share Amounts)
(unaudited) | |||||||
2021 |
2020 |
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Current assets: | |||||||
Cash and cash equivalents | $ | 6,077 | $ | 8,608 | |||
Restricted cash | 658 | 672 | |||||
Short-term investment securities | 23,022 | 19,793 | |||||
Accounts receivable, net of |
9,592 | 10,115 | |||||
Inventories | 22,189 | 19,513 | |||||
Contract assets | 11,618 | 9,107 | |||||
Other current assets | 1,872 | 1,466 | |||||
Total current assets | 75,028 | 69,274 | |||||
Property, plant and equipment | 47,320 | 45,661 | |||||
Less: Accumulated depreciation | 33,080 | 31,484 | |||||
Net property, plant and equipment | 14,240 | 14,177 | |||||
13,873 | 13,714 | ||||||
Intangible assets, net | 9,791 | 10,785 | |||||
Operating lease right-of-use assets, net | 5,782 | 6,701 | |||||
Investment in partnerships | 592 | 570 | |||||
Long-term investment securities | 3,794 | 5,085 | |||||
Other assets, net | 987 | 990 | |||||
Total assets | $ | 124,087 | $ | 121,296 | |||
Current liabilities: | |||||||
Current financing leases | $ | 7 | $ | 21 | |||
Current operating leases | 2,027 | 2,156 | |||||
Accounts payable | 10,102 | 8,670 | |||||
Accrued salaries, wages and commissions | 4,438 | 3,581 | |||||
Other accrued liabilities | 6,059 | 4,235 | |||||
Total current liabilities | 22,633 | 18,663 | |||||
Noncurrent operating leases | 3,896 | 4,726 | |||||
Other postretirement benefit obligations | 363 | 385 | |||||
Accrued pension liabilities | 809 | 907 | |||||
Deferred tax liabilities, net | 1,028 | 1,018 | |||||
Other long-term liabilities | 3,403 | 4,398 | |||||
Total liabilities | 32,132 | 30,097 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock, |
9,082 | 8,951 | |||||
Additional paid-in capital | 90,532 | 89,702 | |||||
Accumulated deficit | (7,275 | ) | (6,810 | ) | |||
Accumulated other comprehensive loss | (446 | ) | (679 | ) | |||
Total shareholders' equity | 91,893 | 91,164 | |||||
Non-controlling interest | 62 | 35 | |||||
Total equity | 91,955 | 91,199 | |||||
Total liabilities and equity | $ | 124,087 | $ | 121,296 |
Reconciliation of Adjusted Net Income and Earnings Per Share
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net loss - GAAP attributable to |
$ | (1,179 | ) | $ | (2,281 | ) | $ | (465 | ) | $ | (4,260 | ) | |||
Identified adjustments attributable to |
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Depreciation (1) | 751 | 757 | 1,592 | 1,443 | |||||||||||
Amortization of intangibles (2) | 497 | 364 | 994 | 462 | |||||||||||
Stock-based compensation (3) | 566 | 936 | 1,019 | 1,312 | |||||||||||
Other amortization (4) | 99 | 11 | 201 | 148 | |||||||||||
Legal settlement and related Fees (5) | 1,360 | 142 | 1,433 | 173 | |||||||||||
Fair value of contingent consideration (6) | 55 | - | 90 | - | |||||||||||
COVID-19 |
(20 | ) | (356 | ) | (141 | ) | (356 | ) | |||||||
EMS acquisition costs (8) | - | 493 | - | 493 | |||||||||||
Restructuring charges (9) | - | 1,171 | - | 1,171 | |||||||||||
CEO Retirement costs (10) | - | 823 | - | 823 | |||||||||||
Non-GAAP adjusted net income attributable to |
$ | 2,129 | $ | 2,060 | $ | 4,723 | $ | 1,409 | |||||||
Non-GAAP adjusted net income attributable to |
$ | 0.23 | $ | 0.23 | $ | 0.52 | $ | 0.16 | |||||||
(1) Depreciation represents the expense of property, plant and equipment. | |||||||||||||||
(2) These expenses represent amortization expenses of intangible assets. | |||||||||||||||
(3) Stock-based compensation represents expenses related to awards under the Company's equity incentive plans. | |||||||||||||||
(4) These expenses represent amortization of other assets. | |||||||||||||||
(5) The Company's subsidiary, |
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(6) These expenses represent changes in the fair value of contingent consideration in the period for the purchase of EMS. | |||||||||||||||
(7) Singapore Government provided COVID-19 financial assistance to our |
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(8) In May of 2020, the Company acquired EMS and recorded |
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(9) On |
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(10) The CEO Transition Agreement signed in |
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(11) None of these adjustments have a material income tax impact. |

Source: Intricon Corporation