MINNEAPOLIS, May 5, 2016 /PRNewswire/ -- Cogentix Medical, Inc. (NASDAQ: CGNT), a global medical device company with innovative and proprietary products serving urology and airway management markets, today announced financial results for the quarter ended March 31, 2016.
Overview of First Quarter Ended March 31, 2016
- Revenue increased to $12.2 million, an increase of 74% from the revenue during the comparable period last year and declined 4% from the pro forma combined revenue of Uroplasty and Vision-Sciences during the same period last year. Revenue during the comparable period in the prior year included $1.1 million generated from the distribution agreement with Stryker Corporation for the Company's endoscopy technologies. The distribution arrangement with Stryker was unprofitable for the Company and was not renewed at the end of calendar year 2015. Excluding the contribution from this distribution agreement, revenue would have increased 5% from the pro forma combined revenue of Uroplasty and Vision-Sciences in the comparable period last year.
- U.S. revenue from Urgent® PC increased 6%, and U.S. revenue from PrimeSight Urology Direct (excluding the aforementioned Stryker revenue) increased 49% from the pro forma revenue during the comparable period last year.
- Gross margin was 68.9%, an increase from the pro forma combined gross margin of 66.2% in the year ago quarter.
- Operating costs (excluding amortization and merger related costs) of $8.4 million declined by $2.8 million from pro forma non-GAAP operating costs during the comparable period last year.
- Cash operating profit of $0.3 million, excluding all non-cash items and merger related costs, increased from the cash operating loss of $0.5 million during the comparable period last year.
"We achieved five percent pro forma revenue growth excluding the impact of the now-terminated unprofitable distribution agreement with Stryker," said Rob Kill, President and CEO. "This result was slightly above our expectations, and given the challenging comparable in the prior year period, was a strong start to the fiscal year. Revenue growth has since accelerated, and through April, year-to-date revenue growth is now 11% when excluding the Stryker impact. Most importantly, we also reported our second consecutive quarter of cash operating profit in the first quarter, and we remain on track to achieve our guidance of a cash operating profit for the full year."
Financial Results for Quarter Ended March 31, 2016
For the quarter ended March 31, 2016, total revenue of $12.2 million represented an increase of 74% as compared to $7.0 million in the comparable period last year. The growth is primarily attributable to the merger of Uroplasty and Vision-Sciences that was completed on March 31, 2015. In accordance with GAAP, the reported financial results for the comparable quarter of the prior year include only the results of Uroplasty, Inc. On a pro forma combined basis, revenue declined 4% over the same period of the prior year. Revenue during the comparable period in the prior year included $1.1 million associated with the distribution arrangement with Stryker Corporation for the Company's endoscopy technologies. The distribution arrangement was unprofitable for the company and was not renewed at end of calendar 2015. Excluding this $1.1 million impact, revenue would have increased 5% over the comparable period in the prior year. Global revenue from Urgent PC totaled $5.1 million, up 7% from the same period last year. Global revenue from endoscopy technologies totaled $5.0 million, down 12% from the pro forma revenue in the comparable period a year ago. However, excluding the $1.1 million of revenue from Stryker sales, revenue growth for endoscopy technologies was up approximately 9% from the pro forma revenue of the comparable period last year. Global Macroplastique revenue totaled $1.9 million, down 7% from the comparable period a year ago.
Gross margin for the quarter ended March 31, 2016 was 68.9%, up from the 66.2% gross margin in the year ago period on a pro forma non-GAAP basis. Operating expenses in the quarter, excluding $0.6 million of intangible amortization and no merger related costs, totaled $8.4 million. This represents a decrease of $2.8 million from the pro forma non-GAAP operating expense in the comparable year-ago period.
Cash operating profit was $0.3 million for the quarter ended March 31, 2016 excluding all non-cash items and merger related costs. This compares to a pro forma cash operating loss of $0.5 million in the comparable year-ago period. The GAAP loss per share was $0.04 in the quarter ended March 31, 2016, compared to a reported loss per share of $0.15 in the comparable year-ago period.
The Company's cash balance totaled $2.2 million as of March 31, 2016. The company added $0.2 million of cash to the balance sheet during the quarter and there were no borrowings under the Company's $7.0 million line of credit as of March 31, 2016.
Outlook
The Company re-affirmed its guidance for a cash operating profit for the full-year fiscal 2016. This result would be a significant improvement over the calendar year 2015 pro forma cash operating loss of $3.7 million and the calendar year 2014 pro forma cash operating loss of $9.1 million. The Company also continues to expect continued strong growth from its endoscopy product lines while Macroplastique revenue is expected to be approximately flat with 2015 levels. Finally, the Company will continue to assess the competitive market dynamics post-launch of a competing Urgent PC (PTNS) product before providing specific total Company revenue guidance for 2016.
Conference Call
Cogentix Medical will host a conference call and webcast today at 4:30 p.m. Eastern Time (3:30 p.m. Central Time). Rob Kill, President and Chief Executive Officer, and Darin Hammers, Chief Operating Officer, will host the event. Individuals wishing to participate in the conference call should dial 877-303-1595 with the conference ID number 1602977. To access a live webcast of the call, go to the investor relations section of Cogentix Medical's website at ir.cogentixmedical.com.
An audio replay will be available for 30 days following the call at 855-859-2056 with the conference ID number 1602977. An archived webcast will also be available at ir.cogentixmedical.com.
About Cogentix Medical
Cogentix Medical, Inc., headquartered in Minnetonka, Minnesota, with additional operations in New York, Massachusetts, The Netherlands and the United Kingdom, is a global medical device company. We design, develop, manufacture and market products for flexible endoscopy with our unique product lines featuring a streamlined visualization system and proprietary sterile disposable microbial barrier, known as EndoSheath technology, providing users with efficient and cost effective endoscope turnover while enhancing patient safety. We also commercialize the Urgent® PC Neuromodulation System, an FDA-cleared device that delivers percutaneous tibial nerve stimulation (PTNS) for the office-based treatment of overactive bladder (OAB). OAB is a chronic condition that affects approximately 42 million U.S. adults. The symptoms include urinary urgency, frequency and urge incontinence. We also offer Macroplastique®, an injectable urethral bulking agent for the treatment of adult female stress urinary incontinence primarily due to intrinsic sphincter deficiency. For more information on Cogentix Medical and our products, please visit us at www.cogentixmedical.com. 'CGNT-G'
For Further Information:
EVC Group
Doug Sherk/Brian Moore (Investors)
415-652-9100/310-579-6199
Cautionary Statements Related to Forward-Looking Statements
This press release includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "forecast," "goal," "project," and other words of similar meaning. Forward-looking statements in this press release include, but are not limited to, statements about the benefits of the merger; expected revenue growth rates; the anticipated timing of cash flow breakeven from operations and cash flow positive from operations; and plans, objectives, expectations and intentions with respect to future operations, products and services. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement.
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