Intricon Reports Third Quarter 2020 Results
"Third quarter results included both year-over-year and sequential revenue growth as we see improvement across all our target medical markets. Continued emphasis on expense control while leveraging our core competencies to enter new medical markets for long-term growth remains a priority," said
Third Quarter Highlights:
• Revenue of
- Diabetes revenue declined 7.7% year-over-year
- Other medical revenue increased 81.6% year-over-year, which included the contribution from recently acquired Emerald Medical Services
• Gross margin of 26.3%, compared to 25.2% in the prior year period
• Net income per diluted share of
Third Quarter 2020 Financial Results
For the 2020 third quarter, the company reported net revenue of
Revenue in Intricon’s Medical business was
Hearing Health revenue was
Gross margin in the third quarter of 2020 was 26.3%, compared to 25.2% in the prior-year third quarter, primarily due to the cost reduction initiatives and higher volumes.
Operating expenses for the third quarter were
The company posted a net income of
Conference Call
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, the impact of the Emerald acquisition, statements regarding the estimated costs and expenses of the restructuring and estimated annual expense savings, 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, the risks associated with the Emerald acquisition, , 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
Headquartered in Arden Hills, Minn., Intricon Corporation designs, develops and manufactures miniature interventional, implantable and body-worn devices. These advanced products help medical, healthcare and professional communications companies meet the rising demand for smaller, more intelligent and better-connected devices. Intricon has facilities in the United States, Asia, and Europe. The company’s common stock trades under the symbol “IIN” on the NASDAQ Global Market. For more information about Intricon, visit www.intricon.com.
Investor Contact
(415) 937-5404
investorrelations@intricon.com
MARKET REVENUE
(Unaudited)
THIRD QUARTER | YEAR TO DATE | ||||||||||||||||
($ in 000's) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||
Medical | $ | 20,649 | $ | 19,099 | 8.1 | % | $ | 55,125 | $ | 60,784 | -9.3 | % | |||||
Diabetes | 14,518 | 15,723 | -7.7 | % | 41,569 | 50,837 | -18.2 | % | |||||||||
Other Medical | 6,131 | 3,376 | 81.6 | % | 13,556 | 9,947 | 36.3 | % | |||||||||
Hearing Health | 5,491 | 6,358 | -13.6 | % | 13,845 | 20,044 | -30.9 | % | |||||||||
Value Based Direct-to-End-Consumer | 953 | 1,510 | -36.9 | % | 3,513 | 4,876 | -28.0 | % | |||||||||
Value Based Indirect-to-End-Consumer | 1,779 | 2,443 | -27.2 | % | 3,888 | 7,419 | -47.6 | % | |||||||||
Legacy OEM | 2,759 | 2,405 | 14.7 | % | 6,444 | 7,749 | -16.8 | % | |||||||||
1,227 | 1,436 | -14.6 | % | 3,502 | 4,972 | -29.6 | % | ||||||||||
Total | $ | 27,367 | $ | 26,893 | 1.8 | % | $ | 72,472 | $ | 85,800 | -15.5 | % |
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Three Months Ended | Nine Months Ended | |||||||||||||
(unaudited) | ||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Revenue, net | $ | 27,367 | $ | 26,893 | $ | 72,472 | $ | 85,800 | ||||||
Cost of goods sold | 20,169 | 20,120 | 54,096 | 62,253 | ||||||||||
Gross profit | 7,198 | 6,773 | 18,376 | 23,547 | ||||||||||
Operating expenses: | ||||||||||||||
Sales and marketing | 1,365 | 2,609 | 5,038 | 9,071 | ||||||||||
General and administrative | 3,654 | 3,715 | 11,673 | 10,551 | ||||||||||
Research and development | 1,458 | 840 | 3,868 | 2,902 | ||||||||||
Restructuring charges | - | - | 1,171 | - | ||||||||||
Impairment loss | - | - | - | 3,765 | ||||||||||
Other operating expenses | 253 | - | 746 | - | ||||||||||
Total operating expenses | 6,730 | 7,164 | 22,496 | 26,289 | ||||||||||
Operating income (loss) | 468 | (391 | ) | (4,120 | ) | (2,742 | ) | |||||||
Interest income, net | 41 | 240 | 322 | 703 | ||||||||||
Other income (expense), net | 192 | (52 | ) | 293 | (458 | ) | ||||||||
Income (loss) from continuing operations before income taxes and discontinued operations | 701 | (203 | ) | (3,505 | ) | (2,497 | ) | |||||||
Income tax expense | 47 | 87 | 94 | 334 | ||||||||||
Income (loss) from continuing operations before discontinued operations | 654 | (290 | ) | (3,599 | ) | (2,831 | ) | |||||||
Loss on disposal of discontinued operations | - | - | - | (1,116 | ) | |||||||||
Loss from discontinued operations | - | - | - | (597 | ) | |||||||||
Net income (loss) | 654 | (290 | ) | (3,599 | ) | (4,544 | ) | |||||||
Less: Income allocated to non-controlling interest | 10 | - | 17 | - | ||||||||||
Net income (loss) attributable to |
$ | 644 | $ | (290 | ) | $ | (3,616 | ) | $ | (4,544 | ) | |||
Basic income (loss) per share attributable to |
||||||||||||||
Continuing operations | $ | 0.07 | $ | (0.03 | ) | $ | (0.41 | ) | $ | (0.32 | ) | |||
Discontinued operations | - | - | - | (0.20 | ) | |||||||||
Net income (loss) per share: | $ | 0.07 | $ | (0.03 | ) | $ | (0.41 | ) | $ | (0.52 | ) | |||
Diluted income (loss) per share attributable to |
||||||||||||||
Continuing operations | $ | 0.07 | $ | (0.03 | ) | $ | (0.41 | ) | $ | (0.32 | ) | |||
Discontinued operations | - | - | - | (0.20 | ) | |||||||||
Net income (loss) per share: | $ | 0.07 | $ | (0.03 | ) | $ | (0.41 | ) | $ | (0.52 | ) | |||
Average shares outstanding: | ||||||||||||||
Basic | 8,936 | 8,764 | 8,877 | 8,738 | ||||||||||
Diluted | 9,272 | 8,764 | 8,877 | 8,738 |
CONSOLIDATED CONDENSED BALANCE SHEET
(In Thousands, Except Share Amounts)
(unaudited) | |||||||
2020 | 2019 | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 16,081 | $ | 8,523 | |||
Restricted cash | 647 | 639 | |||||
Short-term investment securities | 14,176 | 23,451 | |||||
Accounts receivable, less provision for doubtful accounts of |
9,192 | 8,993 | |||||
Inventories | 20,463 | 16,377 | |||||
Contract assets | 10,592 | 10,237 | |||||
Other current assets | 1,426 | 1,975 | |||||
Current assets of discontinued operations | - | 80 | |||||
Total current assets | 72,577 | 70,275 | |||||
Machinery and equipment | 45,083 | 41,073 | |||||
Less: Accumulated depreciation | 30,915 | 27,522 | |||||
Net machinery and equipment | 14,168 | 13,551 | |||||
13,714 | 9,551 | ||||||
Intangible assets | 11,282 | 5,545 | |||||
Operating lease right-of-use assets, net | 3,812 | 4,372 | |||||
Investment in partnerships | 623 | 1,160 | |||||
Long-term investment securities | - | 8,629 | |||||
Other assets, net | 289 | 510 | |||||
Total assets | $ | 116,465 | $ | 113,593 | |||
Current liabilities: | |||||||
Current financing leases | $ | 34 | $ | 101 | |||
Current operating leases | 1,512 | 1,729 | |||||
Accounts payable | 8,340 | 9,876 | |||||
Accrued salaries, wages and commissions | 4,271 | 2,274 | |||||
Other accrued liabilities | 4,429 | 2,869 | |||||
Liabilities of discontinued operations | - | 77 | |||||
Total current liabilities | 18,586 | 16,926 | |||||
Noncurrent financing leases | 2 | 30 | |||||
Noncurrent operating leases | 2,475 | 2,937 | |||||
Other postretirement benefit obligations | 349 | 382 | |||||
Accrued pension liabilities | 667 | 655 | |||||
Deferred tax liabilities, net | 1,104 | - | |||||
Other long-term liabilities | 3,790 | 2,171 | |||||
Total liabilities | 26,973 | 23,101 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock, |
8,943 | 8,781 | |||||
Additional paid-in capital | 88,908 | 86,770 | |||||
Accumulated deficit | (7,902 | ) | (4,286 | ) | |||
Accumulated other comprehensive loss | (474 | ) | (520 | ) | |||
Total shareholders' equity | 89,475 | 90,745 | |||||
Non-controlling interest | 17 | (253 | ) | ||||
Total equity | 89,492 | 90,492 | |||||
Total liabilities and equity | $ | 116,465 | $ | 113,593 |
Source: IntriCon Corporation