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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) February 25, 2021

 

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 2.02 Results 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 February 25, 2021, IntriCon Corporation (the “Company”) announced earnings for the quarter and year ended December 31, 2020. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

 

Item 7.01 Regulation 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 9.01 Financial Statements and Exhibits.  
     
            (d) Exhibits  

 

Exhibit No.   Description  
99.1   Press Release dated February 25, 2021.

 

1 

 

  

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 and Chief Executive Officer

 

Date: February 25, 2021

 

E-1

 

Exhibit 99.1

 

INTRICON REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS

 

ARDEN HILLS, Minn. — February 25, 2021 — 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 fourth quarter and year ended December 31, 2020.

 

Fourth Quarter Highlights:

Revenue of $30.3 million compared to $27.7 million in the prior year period

oDiabetes revenue was flat compared to the prior year period

oOther medical revenue increased 74.3% over the prior year period, which included the contribution from Emerald Medical Services (“EMS”) acquired in May 2020

Gross margin of 25.7%, compared to 26.9% in the prior year period

Net income of $0.12 per diluted share versus net income of $0.08 per diluted share in the prior year period

As of December 31, 2020, the company had approximately $33.5 million of cash and investments

 

Full Year Financial Highlights:

Revenue of $102.8 million compared to $113.5 million in the prior year

oDiabetes revenue declined 13.5% year-over-year

oOther medical revenue increased 46.3% year-over-year, which included the contribution from the acquisition of EMS

Gross margin of 25.5%, compared to 27.3% in the prior year

Net loss per diluted share of $0.28 versus net loss of $0.43 per diluted share in the prior year

  

“Despite the ongoing impact of COVID-19, we were able to generate solid fourth quarter results and advance our operational goals,” said Scott Longval, President and Chief Executive Officer. “I’m proud of the meaningful progress we’ve made towards expanding existing key relationships and leveraging our core competencies to diversify our customer base and medical markets. Our successful acquisition of Emerald Medical Services last May further supported our growth while also allowing us to expand into new markets. And, most recently, we welcomed Ellen Scipta as CFO to further build out our leadership team.

 

“To highlight Intricon’s evolution, as well as our renewed commitment to our corporate vision, we recently completed an extensive rebranding effort that incorporated an enhanced website that also includes our Environmental, Social, and Governance (ESG) policies and disclosures,” added Longval. “We enter 2021 focused more than ever on our underlying mission to be the leading joint development manufacturer in micromedical technology.”

 

Fourth Quarter 2020 Financial Results 

For the 2020 fourth quarter, the company reported net revenue of $30.3 million versus $27.7 million in the comparable prior-year period.

 

(more)

 

 

 

 

Revenue in Intricon’s Medical business was $23.9 million, an increase from $21.3 million in the comparable prior-year period. The year-over-year increase was driven primarily by the impact of EMS, which the company acquired in May 2020.

 

Hearing Health revenue was $5.1 million in the fourth quarter of 2020 compared to $4.9 million in the prior-year fourth quarter. The revenue increase was largely attributed to stronger legacy OEM and indirect-to-end-consumer sales, reflecting pent-up demand from the early days of the COVID-19 pandemic, partially offset by the expected decline in direct-to-end-consumer business.

 

Gross margin in the fourth quarter of 2020 was 25.7%, compared to 26.9% in the prior-year fourth quarter, primarily due to product mix.

 

Operating expenses for the fourth quarter were $6.8 million, compared to $6.7 million in the comparable prior-year period. The slight increase was due to $0.5 million in EMS operating expenses and a $0.4 million expense related to increases in fair value of the EMS earn-out liability, partially offset by previously disclosed cost reduction initiatives.

 

The company posted net income of $1.1 million or $0.12 per diluted share in the fourth quarter of 2020, versus net income of $0.77 million or $0.08 per diluted share, for the 2019 fourth quarter.

 

Full Year 2020 Financial Results 

For 2020, the company reported net revenue of $102.8 million versus $113.5 million in 2019.

 

Revenue in Intricon’s Medical business was $79.0 million for 2020, a decrease from $82.1 million in 2019. The year-over-year decrease was driven primarily by the reduction in orders due to uncertainty surrounding the COVID-19 pandemic partially offset by the previously mentioned acquisition of EMS, which contributed $7.4 million in revenue during 2020.

 

Hearing Health revenue was $19.0 million in 2020 compared to $24.9 million in 2019. The revenue decrease year-over-year 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, leading to reduced sales.

 

Gross margin in 2020 was 25.5%, compared to 27.3% in 2019, primarily due to lower revenues volumes, product mix, partially offset by cost reduction initiatives implemented in the 2020 second quarter.

 

Operating expenses for 2020 were $29.3 million, compared to $33.0 million in 2019. The change in operating expenses year-over-year was due to cost reduction initiatives, partially offset by $1.5 million in EMS operating expenses, $0.7 million of expense related increases in fair value of the EMS earn-out liability and $0.8 million in costs associated with the CEO Transition Agreement signed in June 2020.

 

The company posted a net loss of $2.5 million or $0.28 per diluted share for 2020, versus net loss of $3.8 million or $0.43 per diluted share, for 2019.

 

 

 

 

Total cash and investments was $33.5 million as of December 31, 2020, compared to $40.6 million as of December 31, 2019.

 

Guidance 

Due to continued uncertainties resulting from the COVID-19 global pandemic, the company is not issuing 2021 financial guidance at this time.

 

Conference Call  

Intricon will hold a conference call today, February 25, 2021, 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: 5468087. 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, 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 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 September 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
Intricon is a Joint Development Manufacturer that integrates components and assemblies to advance micro-medical technology across a range of device platforms for global customers. Intricon approaches each engagement with an all-in commitment, working with customers every step of the way- from the earliest idea stages to ongoing production - in order to advance program performance and deliver results. With a focus on key device platforms, Intricon helps advance clinical outcomes by always looking ahead with proactive support and resources through integration of its core competencies. 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.

 

Investor Contact
Leigh Salvo
(415) 937-5404 
investorrelations@intricon.com

 

 

 

 

INTRICON CORPORATION 

MARKET REVENUE 

(Unaudited)

 

    FOURTH QUARTER      YEAR TO DATE  
($ in 000’s)   2020    2019    Change    2020    2019    Change 
                               
Diabetes  $17,742   $17,769    -0.2%  $59,311   $68,606    -13.5%
Other Medical   6,170    3,540    74.3%   19,726    13,487    46.3%
Value Hearing Health - Direct-to-End-Consumer   917    1,244    -26.3%   4,430    6,120    -27.6%
Value Hearing Health - Indirect-to-End-Consumer   1,546    1,491    3.7%   5,558    8,910    -37.6%
Hearing Health - Legacy OEM   2,648    2,144    23.5%   8,968    9,892    -9.3%
Professional Audio Communications   1,278    1,506    -15.1%   4,780    6,478    -26.2%
                               
Total  $30,301   $27,694    9.4%  $102,773   $113,493    -9.4%

 

 

 

 

INTRICON CORPORATION 

CONSOLIDATED STATEMENT OF OPERATIONS 

(In Thousands, Except Per Share Amounts)

 

   Three Months Ended   Twelve Months Ended 
   December 31,   December 31,   December 31,   December 31, 
   2020   2019   2020   2019 
                 
Revenue, net  $30,301   $27,694   $102,773   $113,493 
Cost of goods sold   22,502    20,254    76,598    82,507 
Gross profit   7,799    7,440    26,175    30,986 
                     
Operating expenses:                    
Sales and marketing   1,633    2,428    6,671    11,498 
General and administrative   3,334    3,382    15,007    13,933 
Research and development   1,380    928    5,248    3,830 
Restructuring charges           1,171     
Impairment loss               3,765 
Other operating expenses   407        1,153     
Total operating expenses   6,754    6,738    29,250    33,026 
Operating income (loss)   1,045    702    (3,075)   (2,040)
                     
Interest income, net   9    217    331    920 
Other income (expense), net   23    (284)   316    (743)
Income (loss) from continuing operations before income taxes and discontinued operations   1,077    635    (2,428)   (1,863)
Income tax expense (benefit)   (33)   (133)   61    201 
Income (loss) from continuing operations before discontinued operations   1,110    768    (2,489)   (2,064)
Loss on disposal of discontinued operations               (1,116)
Loss from discontinued operations               (597)
Net income (loss)   1,110    768    (2,489)   (3,777)
Less: Income allocated to non-controlling interest   18        35     
Net income (loss) attributable to Intricon shareholders  $1,092   $768   $(2,524)  $(3,777)
                     
Basic income (loss) per share attributable to Intricon shareholders:                    
Continuing operations  $0.12   $0.09   $(0.28)  $(0.23)
Discontinued operations               (0.20)
Net income (loss) per share:  $0.12   $0.09   $(0.28)  $(0.43)
                     
Diluted income (loss) per share attributable to Intricon shareholders:                    
Continuing operations  $0.12   $0.08   $(0.28)  $(0.23)
Discontinued operations               (0.20)
Net income (loss) per share:  $0.12   $0.08   $(0.28)  $(0.43)
                     
Average shares outstanding:                    
Basic   8,945    8,779    8,894    8,748 
Diluted   9,447    9,398    8,894    8,748 

 

 

 

 

INTRICON CORPORATION 

CONSOLIDATED BALANCE SHEET 

(In Thousands, Except Per Share Amounts)

 

   December 31,   December 31, 
   2020   2019 
Current assets:          
Cash and cash equivalents  $8,608   $8,523 
Restricted cash   672    639 
Short-term investment securities   19,793    23,451 
Accounts receivable, less provision for doubtful accounts of $210 at December 31, 2020 and $325 at December 31, 2019   10,115    8,993 
Inventories   19,513    16,377 
Contract assets   9,107    10,237 
Other current assets   1,466    1,975 
Current assets of discontinued operations       80 
Total current assets   69,274    70,275 
           
  Machinery and equipment   45,661    41,073 
Less:  Accumulated depreciation   31,484    27,522 
Net machinery and equipment   14,177    13,551 
           
Goodwill   13,714    9,551 
Intangible assets   10,785    5,545 
Operating lease right-of-use assets, net   6,701    4,372 
Investment in partnerships   570    1,160 
Long-term investment securities   5,085    8,629 
Other assets, net   990    510 
Total assets  $121,296   $113,593 
           
Current liabilities:          
Current financing leases  $21   $101 
Current operating leases   2,156    1,729 
Accounts payable   8,670    9,876 
Accrued salaries, wages and commissions   3,581    2,274 
Other accrued liabilities   4,235    2,869 
Liabilities of discontinued operations       77 
Total current liabilities   18,663    16,926 
           
Noncurrent financing leases       30 
Noncurrent operating leases   4,726    2,937 
Other postretirement benefit obligations   385    382 
Accrued pension liabilities   907    655 
Deferred tax liabilities, net   1,018     
Other long-term liabilities   4,398    2,171 
Total liabilities   30,097    23,101 
Commitments and contingencies          
Shareholders’ equity:          
Common stock, $1.00 par value per share; 20,000 shares authorized; 8,951 and 8,781 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively   8,951    8,781 
Additional paid-in capital   89,702    86,770 
Accumulated deficit   (6,810)   (4,286)
Accumulated other comprehensive loss   (679)   (520)
Total shareholders’ equity   91,164    90,745 
Non-controlling interest   35    (253)
Total equity   91,199    90,492 
Total liabilities and equity  $121,296   $113,593