Intricon Reports Third Quarter 2021 Results
Third Quarter 2021 Highlights:
- Revenue of
$31.1 million , a 13.5% increase compared to the prior year period - Gross profit margin of 23.1%, compared to 26.3% in the prior year period
- GAAP net income of
$337,000 versus net income of$644,000 in the prior year period - Non-GAAP adjusted net income of
$1.7 million versus$2.4 million in the prior year period - Cash and investment securities of
$33.1 million as ofSeptember 30, 2021 - Completed Summative Usability Validation for self-fitting hearing aid technology clinical trial
“Strong customer demand persisted in each of our core markets throughout the third quarter, leading to another period of year-over-year and sequential revenue growth. Our business continued to see increased order flow in our diabetes business, expansion in our hearing health pilot programs with a ramp up in activity ahead of the final OTC regulation, along with sustained growth in our interventional catheter business,” said
“As we enter the final quarter of the year, I’m more encouraged than ever by several exciting catalysts on the horizon that we are tracking for accelerated growth,” Longval concluded.
Third Quarter 2021 Financial Results
Revenue
Net revenue for the third quarter 2021 increased 13.5% to
Diabetes revenue increased 24.2% to
Interventional Catheter revenue increased 22.2% to
Surgical Navigation revenue was
Hearing Health revenue decreased 14.3% to
Gross Profit Margin and Operating Expenses
Gross profit margin in the third quarter of 2021 was 23.1%, compared to 26.3% in the prior-year third quarter. The lower margin was due, in part, to supply chain constraints, higher labor costs and product mix.
Operating expenses were flat for the third quarter at
GAAP Net Income
The company posted GAAP net income 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)
THIRD QUARTER | YEAR TO DATE | ||||||||||||||||
($ in 000's) | 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||
Diabetes | $ | 18,025 | $ | 14,518 | 24.2 | % | $ | 51,636 | $ | 41,569 | 24.2 | % | |||||
Interventional Catheters | 3,439 | 2,815 | 22.2 | % | 11,439 | 3,961 | 188.8 | % | |||||||||
Other Medical | 3,846 | 3,316 | 16.0 | % | 10,314 | 9,595 | 7.5 | % | |||||||||
Hearing Health Value Based DTEC | 800 | 953 | -16.1 | % | 2,687 | 3,513 | -23.5 | % | |||||||||
Hearing Health Value Based ITEC | 1,298 | 1,779 | -27.0 | % | 5,853 | 3,888 | 50.5 | % | |||||||||
Hearing Health Legacy OEM | 2,610 | 2,759 | -5.4 | % | 8,235 | 6,444 | 27.8 | % | |||||||||
1,032 | 1,227 | -15.9 | % | 2,869 | 3,502 | -18.1 | % | ||||||||||
Total | $ | 31,050 | $ | 27,367 | 13.5 | % | $ | 93,033 | $ | 72,472 | 28.4 | % | |||||
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Three Months Ended | Nine Months Ended | |||||||||||||
(unaudited) | ||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||
Revenue, net | $ | 31,050 | $ | 27,367 | $ | 93,033 | $ | 72,472 | ||||||
Cost of goods sold | 23,865 | 20,169 | 69,766 | 54,096 | ||||||||||
Gross profit | 7,185 | 7,198 | 23,267 | 18,376 | ||||||||||
Operating expenses: | ||||||||||||||
Sales and marketing | 2,048 | 1,365 | 6,051 | 5,038 | ||||||||||
General and administrative | 3,943 | 3,654 | 11,992 | 11,673 | ||||||||||
Research and development | 1,173 | 1,458 | 3,775 | 3,868 | ||||||||||
Other operating (income) expenses | (457 | ) | 253 | 1,066 | 253 | |||||||||
Restructuring charges | - | - | - | 1,171 | ||||||||||
Acquisition costs | - | - | - | 493 | ||||||||||
Total operating expenses | 6,707 | 6,730 | 22,884 | 22,496 | ||||||||||
Operating income (loss) | 478 | 468 | 383 | (4,120 | ) | |||||||||
Interest (expense) income, net | (9 | ) | 41 | (32 | ) | 322 | ||||||||
Other (expense) income, net | (93 | ) | 192 | (261 | ) | 293 | ||||||||
Income (loss) before income taxes | 376 | 701 | 90 | (3,505 | ) | |||||||||
Income tax expense | 8 | 47 | 178 | 94 | ||||||||||
Net income (loss) | 368 | 654 | (88 | ) | (3,599 | ) | ||||||||
Less: Income allocated to non-controlling interest | 31 | 10 | 40 | 17 | ||||||||||
Net income (loss) attributable to |
$ | 337 | $ | 644 | $ | (128 | ) | $ | (3,616 | ) | ||||
Income (loss) per share attributable to |
||||||||||||||
Basic | $ | 0.04 | $ | 0.07 | $ | (0.01 | ) | $ | (0.41 | ) | ||||
Diluted | $ | 0.04 | $ | 0.07 | $ | (0.01 | ) | $ | (0.41 | ) | ||||
Average shares outstanding: | ||||||||||||||
Basic | 9,104 | 8,936 | 9,059 | 8,877 | ||||||||||
Diluted | 9,624 | 9,272 | 9,059 | 8,877 | ||||||||||
CONSOLIDATED BALANCE SHEET
(In Thousands, Except Per Share Amounts)
(unaudited) | |||||||
2021 | 2020 | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 13,020 | $ | 8,608 | |||
Restricted cash | 647 | 672 | |||||
Short-term investment securities | 20,044 | 19,793 | |||||
Accounts receivable, net of |
9,676 | 10,115 | |||||
Inventories | 22,231 | 19,513 | |||||
Contract assets | 11,464 | 9,107 | |||||
Other current assets | 2,175 | 1,466 | |||||
Total current assets | 79,257 | 69,274 | |||||
Property, plant and equipment | 47,722 | 45,661 | |||||
Less: Accumulated depreciation | 33,838 | 31,484 | |||||
Net property, plant and equipment | 13,884 | 14,177 | |||||
13,873 | 13,714 | ||||||
Intangible assets, net | 9,515 | 10,785 | |||||
Operating lease right-of-use assets, net | 5,236 | 6,701 | |||||
Investment in partnerships | 538 | 570 | |||||
Long-term investment securities | - | 5,085 | |||||
Other assets, net | 1,110 | 990 | |||||
Total assets | $ | 123,413 | $ | 121,296 | |||
Current liabilities: | |||||||
Current financing leases | $ | 5 | $ | 21 | |||
Current operating leases | 1,910 | 2,156 | |||||
Accounts payable | 10,321 | 8,670 | |||||
Accrued salaries, wages and commissions | 5,054 | 3,581 | |||||
Other accrued liabilities | 4,230 | 4,235 | |||||
Total current liabilities | 21,520 | 18,663 | |||||
Noncurrent operating leases | 3,446 | 4,726 | |||||
Other postretirement benefit obligations | 352 | 385 | |||||
Accrued pension liabilities | 776 | 907 | |||||
Deferred tax liabilities, net | 1,028 | 1,018 | |||||
Other long-term liabilities | 3,414 | 4,398 | |||||
Total liabilities | 30,536 | 30,097 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock, |
9,114 | 8,951 | |||||
Additional paid-in capital | 91,027 | 89,702 | |||||
Accumulated deficit | (6,938 | ) | (6,810 | ) | |||
Accumulated other comprehensive loss | (419 | ) | (679 | ) | |||
Total shareholders' equity | 92,784 | 91,164 | |||||
Non-controlling interest | 93 | 35 | |||||
Total equity | 92,877 | 91,199 | |||||
Total liabilities and equity | $ | 123,413 | $ | 121,296 | |||
Reconciliation of Adjusted Net Income and Earnings Per Share
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net loss - GAAP attributable to |
$ | 337 | $ | 644 | $ | (128 | ) | $ | (3,616 | ) | |||||
Identified adjustments attributable to |
|||||||||||||||
Depreciation (1) | 761 | 725 | 2,353 | 2,168 | |||||||||||
Amortization of intangibles (2) | 497 | 497 | 1,491 | 959 | |||||||||||
Stock-based compensation (3) | 470 | 332 | 1,489 | 1,644 | |||||||||||
Other amortization (4) | 47 | 8 | 248 | 156 | |||||||||||
Legal settlement and related fees (5) | 22 | 128 | 1,455 | 301 | |||||||||||
Fair value of contingent consideration (6) | (479 | ) | 253 | (389 | ) | 253 | |||||||||
COVID-19 |
- | (230 | ) | (141 | ) | (586 | ) | ||||||||
EMS acquisition costs (8) | - | - | - | 493 | |||||||||||
Restructuring charges (9) | - | - | - | 1,171 | |||||||||||
CEO Retirement costs (10) | - | - | - | 823 | |||||||||||
Non-GAAP adjusted net income attributable to |
$ | 1,655 | $ | 2,357 | $ | 6,378 | $ | 3,766 | |||||||
Average basic shares outstanding | 9,104 | 8,936 | 9,059 | 8,877 | |||||||||||
Average diluted shares outstanding | 9,624 | 9,272 | 9,624 | 9,266 | |||||||||||
Non-GAAP adjusted net income attributable to |
$ | 0.17 | $ | 0.25 | $ | 0.66 | $ | 0.41 | |||||||
(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, |
|||||||||||||||
(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 |
|||||||||||||||
(8) In May of 2020, the Company acquired EMS and recorded |
|||||||||||||||
(9) On |
|||||||||||||||
(10) The CEO Transition Agreement signed in |
|||||||||||||||
(11) None of these adjustments have a material income tax impact. |

Source: Intricon Corporation