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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) November 9, 2020

INTRICON CORPORATION

(Exact name of registrant as specified in its charter)
   

Pennsylvania

1-5005

23-1069060

(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
     

1260 Red Fox Road, Arden Hills, MN 55112

(Address of principal executive offices)  (Zip Code)
 
Registrant’s telephone number, including area code  (651) 636-9770
 

N/A

(Former name or former address, if changed since last report)
 
       

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class Trading Symbol Name of each exchange on which registered
Common stock, par value $1.00 per share IIN Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule l2b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 
 
 
Item 2.02Results of Operations and Financial Condition.

 

The following information is being provided pursuant to Item 2.02. Such information, including Exhibit 99.1 attached hereto, should not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

On November 9, 2020, IntriCon Corporation (the "Company") announced earnings for the quarter ended September 30, 2020. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01Regulation FD Disclosure.

 

The following information is being provided pursuant to Item 7.01. Such information, including Exhibit 99.1 attached hereto, should not be deemed "filed" for purposes of Section 18 of the Exchange Act.

The information contained under Item 2.02 is incorporated herein by reference.

 

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number Description
   
99.1 Press Release Dated November 9, 2020
 
 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

INTRICON CORPORATION

     
  By:

/s/ Scott Longval

  Name: Scott Longval
  Title: President, Chief Executive Officer and Chief Financial Officer

Date: November 9, 2020

 
 

 

Exhibit Index

 

Exhibit Number Description
   
99.1 Press Release Dated November 9, 2020

 

 

 

Exhibit 99.1

 

INTRICON REPORTS THIRD QUARTER 2020 RESULTS

 

ARDEN HILLS, Minn. — November 9, 2020 — Intricon Corporation (NASDAQ: IIN), an international company engaged in designing, developing, engineering and manufacturing miniature interventional, implantable and body-worn medical devices, today announced financial results for its third quarter ended September 30, 2020.

 

“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 Scott Longval, President and Chief Executive Officer. “Our acquisition of Emerald Medical Services earlier this year is already demonstrating a meaningful contribution, while our directed focus on partnerships with innovators entering the emerging hearing health market is gaining traction.”

  

Third Quarter Highlights:

Revenue of $27.4 million compared to $26.9 million in the prior year

oDiabetes revenue declined 7.7% year-over-year

oOther 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 $0.07 versus net loss of $0.03 per diluted share in the prior year period

 

Third Quarter 2020 Financial Results

For the 2020 third quarter, the company reported net revenue of $27.4 million versus $26.9 million in the comparable prior-year period.

  

Revenue in Intricon’s Medical business was $20.6 million, an increase from $19.1 million in the comparable prior-year period. The year-over-year increase was driven primarily by our medical coils business and the impact of Emerald Medical Services which the company acquired in May 2020, partially offset by the reduction in orders due to uncertainty surrounding the COVID-19 pandemic.

 

Hearing Health revenue was $5.5 million in the third quarter of 2020 compared to $6.4 million in the prior-year third quarter. The revenue decline during the third quarter was largely attributed to the absence of hi Health Innovations revenue and a reduction in advertising as part of the Hearing Help Express restructuring efforts.

  

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 $6.7 million, compared to $7.2 million in the comparable prior-year period. The change in operating expenses year over year was due to the cost reduction initiatives.

 

The company posted a net income of $0.6 million or $0.07 per diluted share in the third quarter of 2020, versus net loss of $0.3 million or $0.03 per diluted share, for the 2019 third quarter.

  

(more) 

 

 

 

 

Conference Call

Intricon will hold a conference call today, November 9, 2020, beginning at 4:00 p.m. CT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by dialing 866-795-7248 for domestic callers or 470-495-9160 for international callers, using conference ID: 6348919. A live and archived webcast will be available on the “Investors” sections of the company’s website at: www.Intricon.com.

  

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 Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2019 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.

 

About Intricon Corporation
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
Leigh Salvo
(415) 937-5404
investorrelations@intricon.com

 

 

 

 

 

TRICON CORPORATION

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%
                               
Professional Audio Communications   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%

 

 

 

 

INTRICON CORPORATION 

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS 

(In Thousands, Except Per Share Amounts)

 

   Three Months Ended   Nine Months Ended 
(unaudited)  September 30,   September 30,   September 30,   September 30, 
   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 IntriCon shareholders  $644   $(290)  $(3,616)  $(4,544)
                     
Basic income (loss) per share attributable to IntriCon shareholders:                    
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 IntriCon shareholders:                    
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 

 

 

 

 

INTRICON CORPORATION 

CONSOLIDATED CONDENSED BALANCE SHEET 

(In Thousands, Except Share Amounts)

 

(unaudited)  September 30,   December 31, 
   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 $365 at September 30, 2020 and $325 at December 31, 2019   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 
           
Goodwill   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, $1.00 par value per share; 20,000 shares authorized; 8,943 and 8,781 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively   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