MINNEAPOLIS, May 2, 2017 /PRNewswire/ -- Cogentix Medical, Inc. (NASDAQ: CGNT), a global medical device company focused on providing the Urology, Uro/Gyn and Gynecology markets with innovative and proprietary products, today reported financial results for the first quarter ended March 31, 2017.
First Quarter Highlights
- First quarter revenue totaled $13.0 million, including $11.5 million in Urology product revenue. Urology product revenue increased 11% over last year’s first quarter as reported and 13% on a constant currency basis. First quarter 2017 revenue from the Company’s non-core product lines of Airway Management and Industrial decreased approximately 20% from the year ago period. Total revenue for the first quarter increased 6% year-over-year, which was an increase of 8% on a constant currency basis.
- Gross profit totaled $8.5 million, an increase from $8.4 million in the year ago period due to higher sales partially offset by a lower gross margin due to product mix.
- First quarter GAAP operating loss was $1.2 million compared to an operating loss of $0.6 million in the year ago quarter. The increase was primarily attributable to business development expense incurred in the first quarter of 2017 and higher investment in research and development projects.
- Cash operating loss, a non-GAAP financial measure that excludes non-cash items, was $0.1 million in the first quarter, essentially break-even, compared to a cash operating profit of $0.3 million in the comparable year ago period.
Darin Hammers, President and CEO, commented, “The 11 percent year-over-year growth in our core Urology product revenue illustrates the continued successful execution of our Urology product strategies. As expected, PrimeSight urology products continued to lead our revenue growth with an increase of approximately 45% in the first quarter. The average sales price for our Urgent® PC product line during the first quarter of 2017 was consistent with the pricing we experienced in the fourth quarter of 2016. Our core Urology business is off to a great start in 2017, and we continue to execute on our business development strategy. The addition of Ash Keswani to our team expands our business development scope as we continue to examine opportunities to expand our product offerings within Urology. Further, we have started to explore strategic alternatives for our non-core Airway Management and Industrial product lines that have depressed our recent overall reported growth.”
Financial Results for the First Quarter Ended March 31, 2017
For the quarter ended March 31, 2017, the Company had total revenue of $13.0 million compared to $12.2 million in the year ago quarter. The nearly $0.8 million increase in reported revenue is attributable to a $1.1 million increase in Urology revenue, partially offset by an approximate $350,000 decrease in Airway Management and Industrial revenue. Revenue from PrimeSight Urology totaled $4.5 million, up $1.4 million or 45% from the comparable year-ago period. Urgent PC revenue totaled $5.0 million compared to $5.1 million in the comparable year ago period, comprised of unit growth in the US of approximately 3% offset by lower average selling prices. Macroplastique® revenue in the quarter of $1.8 million decreased approximately $73,000 compared to the prior year period.
Gross margin for the quarter ended March 31, 2017 was 65.3% compared with 68.9% in the year-ago period. Gross margin was impacted by the shift in product mix to a higher proportion of capital equipment sales in this year’s first quarter as compared to the year ago period. Operating expenses in the quarter totaled $9.7 million as compared to $9.0 million in the same period of the prior year. The increase in operating expenses is attributable to higher G&A expenses, partly due to additional business development activities, and higher R&D expenses associated with ongoing enhancements to our endoscopy product line.
Operating loss for the quarter was $1.2 million compared to the operating loss of $0.6 million in the year ago period. Cash operating loss, a non-GAAP financial measure which is operating profit excluding all non-cash items, was $0.1 million for the quarter ended March 31, 2017 compared to a cash operating profit of $0.3 million in the year-ago quarter. Net loss was $1.2 million ($0.02 per share) in the quarter ended March 31, 2017, compared to a net loss of $1.0 million ($0.04 per share) in the comparable year-ago period.
At March 31, 2017, the Company’s cash and investments totaled $25.8 million, compared to $28.3 million at year-end 2016. There were no borrowings under the Company’s $7.0 million line of credit as of March 31, 2017.
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). Darin Hammers, President and Chief Executive Officer, will host the event along with Brett Reynolds, Chief Financial Officer. Individuals wishing to participate in the conference call should dial 877-303-1595 with the conference ID number 10151910. 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 10151910. 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 PrimeSight product lines featuring a streamlined visualization system and proprietary sterile disposable microbial barrier 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:
Cogentix Medical, Inc.
Brett Reynolds, SVP and CFO
952-426-6152
EVC Group
Brian Moore/Doug Sherk
310-579-6199/415-652-9100
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 expected revenue growth rates; the Company’s expectations regarding operating profit and cash operating profit; 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. Applicable risks and uncertainties include, among others, the effects of industry, economic or political conditions outside of the Company’s control; competitive market factors; actual or contingent liabilities; the adequacy of the Company’s capital resources; and the risks identified under the heading “Risk Factors” in the annual report on Form 10-K, for the year ended December 31, 2016, filed with the Securities and Exchange Commission (“SEC”) on March 30, 2017. Investors are cautioned to not to place considerable reliance on the forward-looking statements contained in this presentation. Investors are encouraged to read the Company’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties.
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