Revises Outlook for Full-year FORE-SIGHT Growth
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BRANFORD, Conn., May 03, 2017 (GLOBE NEWSWIRE) -- CAS Medical Systems, Inc. (NASDAQ:CASM) (CASMED), a leader in medical products for non-invasive patient monitoring of tissue oxygenation, today reported financial results for the three months ended March 31, 2017.
Net sales from continuing operations for the first quarter of 2017 were $5.2 million, compared with $5.5 million for the first quarter of 2016. The Company incurred a net loss applicable to common stockholders for the first quarter of 2017 of $2.2 million, or $0.08 per share. This compares with net income applicable to common stockholders for the first quarter of 2016 of $1.1 million, or $0.04 per share, which included a $1.9 million gain, net of income taxes, on the sale of the Company’s neonatal intensive care product line.
Highlights for the first quarter of 2017, compared with the first quarter of 2016, include the following:
- FORE-SIGHT® disposable sensor sales increased 8% and represented 77% of total sales.
- U.S. FORE-SIGHT sales increased 5%, and U.S. FORE-SIGHT disposable sensor sales increased 8%.
- Net 69 FORE-SIGHT cerebral oximeters were shipped worldwide.
- Net cumulative FORE-SIGHT cerebral oximeters shipped worldwide as of March 31, 2017, increased 21% to 2,157, and the U.S. installed base of monitors increased 21% to 1,158.
- Gross profit margin improved to 54.4% from 52.8%.
- As of March 31, 2017, CASMED had cash, cash equivalents, and borrowings available under its line of credit of $6.5 million.
In the second quarter of 2017, CASMED completed the upgrade and expansion of its U.S. sales organization with the hiring of six sales representatives since the beginning of 2017 and increasing sales territories to 17.
Management Commentary
“The modest oximetry growth we’re reporting for the first quarter was both disappointing and below our expectations,” said Thomas M. Patton, President and Chief Executive Officer of CASMED. “However, we are quite pleased to announce our completed expansion and upgrade of our U.S. field sales force. We believe the rebuilding of our sales force was the principal reason for the slow-down in net productivity. We made the decision last year to invest in our sales organization to capitalize on our best-in-class FORE-SIGHT product in a market we estimate will ultimately reach $800 million in the U.S. alone. We entered the quarter with just five tenured sales reps and six newly hired reps but have since hired an additional six reps for a total of 17 staffed territories. Given the expanded talent and scope of these reps, we fully anticipate productivity gains as tenure matures. FORE-SIGHT and its superior clinical performance continue to be very well received by the industry, as evidenced by a standing-room-only crowd at our symposium at the recent Society of Cardiovascular Anesthesiologists annual meeting and the number of sales leads we received.
“Our outlook is for continued growth in our FORE-SIGHT business this year, yet we are revising our guidance to reflect new expectations. We continue to anticipate accelerated growth in the second half of 2017 as our newly hired sales representatives become increasingly productive.”
CASMED revises its outlook for growth in 2017 compared with 2016 as follows:
- Total FORE-SIGHT sales to increase in mid-single-digit percentages;
- Total FORE-SIGHT disposable sensor sales to increase approximately 10% with U.S. FORE-SIGHT sensor sales to increase in mid-teens percentages; and
- U.S. monitor placements to increase in mid-teens percentages.
First-Quarter Financial Results
Net sales from continuing operations for the first quarter of 2017 were $5.2 million, compared with $5.5 million for the first quarter of 2016, with the decrease primarily due to a decline in FORE-SIGHT monitor sales and lower sales of our non-invasive blood pressure products. FORE-SIGHT oximetry sales for the first quarter of 2017 increased 1% to $4.3 million and included a 5% increase in domestic FORE-SIGHT sales to $3.7 million. Disposable sensor sales for the first quarter of 2017 increased 8% over the prior year. FORE-SIGHT sales accounted for 83% of total sales from continuing operations for the first quarter of 2017.
The loss from continuing operations for the first quarter of 2017 was $1.8 million compared with $546,000 for the first quarter of 2016, which was favorably impacted by an income tax benefit of $1.1 million. Gross profit margin for the first quarter of 2017 improved to 54.4% from 52.8% for the prior-year period, due primarily to manufacturing efficiencies and product mix favoring FORE-SIGHT products. Operating expenses for the first quarter of 2017 increased 2% to $4.4 million from the prior-year period, reflecting increased S,G&A costs, and lower clinical R&D spending.
Cash and cash equivalents were $4.7 million as of March 31, 2017, compared with $5.5 million as of December 31, 2016. As of March 31, 2017, $1.8 million of borrowings were available under the Company’s line of credit.
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