MINNEAPOLIS, Aug. 1, 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 second quarter ended June 30, 2017.
Second Quarter and Business Development Highlights
- Second quarter revenue was $14.1 million, including $12.3 million in Urology product revenue. Urology product revenue, representing 87% of total revenue, increased 11% over last year’s second quarter and 12% on a constant currency basis. Total Company revenue for the second quarter increased 8% over the prior year period and 9% on a constant currency basis.
- Gross profit was $9.4 million or 66.9%, a $0.5 million increase over the prior year period.
- GAAP operating income was $0.4 million in the second quarter, compared to a GAAP operating loss of $2.3 million in the year ago quarter.
- Cash operating profit, a non-GAAP financial measure that excludes non-cash items, was $1.5 million in the second quarter, an increase of $0.7 million when compared to the cash operating profit of $0.8 million in the second quarter of 2016.
- The Company continues to evaluate strategic alternatives for its non-core Industrial and Airway Management product lines.
- In July, the Company announced completion of two business development transactions expected to add approximately 10 points of urology products revenue growth in 2018.
“Cogentix achieved another quarter of double-digit organic revenue growth from our core Urology business,” said Darin Hammers, President and CEO. “This growth was driven by impressive results from our PrimeSight product line, which grew 48% in the quarter, as our physician customers continue to embrace the always ready, always sterile value proposition PrimeSight offers. Unit sales of our Urgent® PC product line grew 5% in the United States during the second quarter, and the average selling price was consistent with the last several quarters. Our sales and marketing team continues to perform at a high level, and we have decided to expand our US sales force by five territories during the third quarter. As a result, we anticipate second half 2017 revenue growth for our Urology business will be above the 11% growth we generated in the first half of the year. Additionally, the two business development agreements we recently executed should add approximately 10 points of growth to urology products revenue in 2018 as these agreements leverage our strong sales and marketing organization. With $27 approximately million in cash and investments, and no debt on our balance sheet, we are continuing to evaluate other business development opportunities so that we can further enhance our growth profile while building value for shareholders.”
Financial Results for the Second Quarter Ended June 30, 2017
For the quarter ended June 30, 2017, the Company achieved total revenue of $14.1 million compared to $13.0 million in the year ago quarter. The $1.1 million increase in reported revenue is attributable to a $1.2 million increase in Urology revenue, partially offset by a decrease in non-core Industrial and Airway Management revenue. Revenue from PrimeSight totaled $5.0 million, up $1.6 million or 48% from the comparable year-ago period. Urgent PC revenue totaled $5.3 million compared to $5.4 million in the comparable year ago period, comprised of 5% unit growth in the U.S. offset by lower average selling prices as compared to the year ago quarter. Revenue from Macroplastique® and other urology product revenue in the quarter totaled $2.0 million, a decrease of approximately $250,000 compared to the prior year period.
Gross margin for the quarter ended June 30, 2017 was 66.9% compared with 68.6% in the year-ago period, with the decrease due to a shift in product mix. Operating expenses in the quarter totaled $9.0 million, flat with the $9.0 million of operating expenses, excluding certain one-time charges, in the same period of the prior year.
Operating profit for the quarter was $0.4 million compared to an operating loss of $2.3 million ($0.1 million excluding one-time charges) in the year ago period. Cash operating profit, a non-GAAP financial measure that is operating profit excluding all non-cash items, was $1.5 million for the quarter ended June 30, 2017 compared to a cash operating profit of $0.8 million (excluding one-time charges) in the year-ago quarter. Net income was $0.4 million ($0.01 per share) in the quarter ended June 30, 2017, compared to a net loss of $2.7 million ($0.10 per share) in the comparable year-ago period.
At June 30, 2017, the Company’s cash and investments totaled $26.9 million, compared to $25.8 million at March 31, 2017. There were no borrowings under the Company’s $7.0 million line of credit as of June 30, 2017.
Six Month Financial Results Ended June 30, 2017
For the six-month period ended June 30, 2017, total revenue of $27.0 million represented an increase of 7% over the year ago period. This increase is due to 11% growth in the Urology business, partially offset by a decline in non-core Airway Management and Industrial revenue.
Operating loss for the six months ended June 30, 2017 was $0.8 million while cash operating profit (which excludes non-cash items) was $1.4 million.
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 57924692. 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 57924692. 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. The forward-looking statements in this presentation speak only as of the date of this release, and the Company undertakes no obligation to update or revise any of these statements.
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