Kensey Nash Corporation Reports Fourth Quarter and Full Fiscal Year 2010 Financial Results

EXTON, Pa., Aug. 23 /PRNewswire-FirstCall/ -- Kensey Nash Corporation (Nasdaq: KNSY), a medical device company primarily focused on regenerative medicine for a wide range of medical procedures, today reported the results for its three months and fiscal year ended June 30, 2010.

Fourth Quarter Snapshot and Recent Developments

• Revenue of $21.9 million for the quarter, exceeding the high end of the Company's previous guidance range of $21.4-$21.8 million.
• Record net sales of $15.1 million, exceeding previous guidance of $14.5-$14.7 million.
• Royalty income of $6.8 million, below previous guidance of $6.9-$7.1 million.
• Record diluted EPS and adjusted diluted EPS* of $0.60 and $0.54, respectively, exceeding the high end of previous guidance of $0.51-$0.53.
• EBITDA* of $11.0 million.
• Operating margin of 42%.
• Operating cash flow of $10.9 million.
• U.S. launch of first ECM product, the XCM Biologic Tissue Matrix, by strategic partner Synthes.
• Received 510(k) clearance from the U.S. Food and Drug Administration for its second extracellular matrix (ECM) product, the Meso BioMatrix product.
• New two-year collagen supply agreement with St. Jude Medical.
• ECM strategic distribution agreement with Arthrex for sports medicine tendon repair and small joint surgeries.

Full Year Fiscal 2010 Financial Overview

• Revenue of $80.6 million, meeting the high end of the Company's previous guidance range of $80.2-$80.6 million.
• Net sales of $54.3 million, exceeding previous guidance of $53.6-$53.8 million
• Royalty income of $26.4 million, below previous guidance of $26.5-$26.7 million
• Record full fiscal year diluted EPS and adjusted diluted EPS* of $1.78 and $1.85, respectively, exceeding the high end of previous guidance for diluted EPS and adjusted diluted EPS* of $1.71-$1.73 and $1.82-$1.84, respectively.
• EBITDA* of $37.5 million.
• Operating margin of 38%.
• Operating cash flow of $30.1 million.
• Research and development investment of 22% of revenue.
• Repurchased 1.8 million shares of Common Stock, or approximately 16% of the shares outstanding.

President and CEO Commentary

"Our Company continues to deliver strong financial results in a challenging economic and healthcare environment. Fourth quarter results reflect an improvement in revenues both sequentially and year over year due to an increase in our sports medicine business, more than offsetting a slowdown in our spine business. Overall, fiscal 2010 biomaterials sales increased 2% reflecting solid product sales growth of 6% in sports medicine and 5% in cardiovascular. In addition, sales of our general surgery products increased 74%, primarily due to the initial shipment of products for the launch of the XCM Biologic Tissue Matrix and the timing of orders from another customer. Partially offsetting the increases in sales of these products was a decline in sales of spine products of 16%, reflecting the overall weakness in this market. Our total net sales were down 1% for the year due to a decrease in endovascular sales of 43% which more than offset the increase in biomaterials sales. Nevertheless, we delivered record fiscal 2010 earnings per share and significant operating cash flow while continuing our commitment to investment in key strategic research and development initiatives, including our ECM and cartilage technologies. In fiscal 2010, we achieved key research milestones, including ECM product approvals in the US and Europe, two ECM collaborative relationships, cartilage repair device CE mark approval, and clarification of the cartilage program's US clinical pathway as we begin our pilot trial this summer," commented Joe Kaufmann, President and CEO of the Company.

Supplemental Sales Data. Details of the Company's net sales for the three months and fiscal year ended June 30, 2010 and 2009 are summarized below.