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Cardiovascular Systems (CSII) Loss Narrows Y/Y in Q4
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Cardiovascular Systems Inc. reported a fourth-quarter fiscal 2016 loss per share of 15 cents, reflecting an improvement of 44.4% from the year-ago quarter’s loss. The loss reported was narrower than the Zacks Consensus Estimate of a loss of 20 cents by 25%.
Per management, the year-over-year improvement in the loss figure was primarily driven by a decline in operating expenses on account of the company’s cost realignment actions, including a reduction in force of about 8% on Mar 31, 2016.
In fiscal 2016, the company’s loss per share was $1.72, narrower than the previous fiscal’s loss by 65.4%. The loss was, however, wider than the Zacks Consensus Estimate of a loss of $1.77 by 2.8%.
Cardiovascular Systems delivered better-than-expected revenues of $48.5 million in the fiscal fourth quarter, almost flat year over year, but comfortably ahead of the Zacks Consensus Estimate of $46 million.
Per management, the strong top-line performance exhibited the company’s efforts to stabilize and support its field sales representatives.
During the reported quarter, Cardiovascular sold over 14,500 devices and added 48 new peripheral accounts and 62 coronary accounts. Coronary device revenues improved 20% to $11.4 million, while peripheral device revenues declined 5% to $37.1 million. Other product revenues declined 27.3% year over year to $4 million due to the termination of an agreement to distribute Asahi guide wires on Jun 30, 2015. Customer reorder revenues were strong at 98% of total revenue, comparing favorably with the fourth quarter of the last fiscal (96%).
In fiscal 2016, the company generated revenues of $178.2 million, down 1.9% year over year. The top-line figure, however, beat the Zacks Consensus Estimate of $176 million.
Gross margin in the reported quarter was 79.7%, up 210 basis points (bps) year over year, primarily on account of unit cost reductions.
Meanwhile, selling and administrative (SG&A) expenses dropped 1.9% to $37.6 million, while research and development (R&D) expenses dropped 24.2% to $6 million. The resultant adjusted operating expenses dropped 5.8% to $43.6 million; mainly exhibiting management’s cost realignment initiatives. Consequently, operating loss improved more than 40% to $5 million.
Financial position
The company’s cash and cash equivalents were $60.6 million at the end of fiscal 2016, compared with $83.8 million as of Jun 30, 2015.
Outlook
Cardiovascular Systems has provided its first-quarter fiscal 2017 guidance. The company expects revenues in the range of $48–$49.5 million. The current Zacks Consensus Estimate for first-quarter fiscal 2017 revenues stands at $49 million, almost in line with the upper end of the company’s guidance.
Moreover, the company expects gross margin of 80% in the fiscal first quarter.
The company expects to incur a net loss in the range of $5.8–$6.7 million or loss per share of 18–21 cents, assuming 32.8 million average shares outstanding. The current Zacks Consensus Estimate is at a loss of 20 cents.
Our Take
Cardiovascular Systems ended fiscal 2016 on a promising note. While the company’s fiscal fourth-quarter loss was narrower than the Zacks Consensus Estimate, the top line also comfortably surpassed the mark. Besides, the company’s lower operating expense was the vital factor that drove the year-over-year improvement in the loss figure. Strong revenue performance also contributed to the improved loss outcome.
Moreover, in the fiscal fourth quarter, Cardiovascular Systems delivered two important milestones, including submission of Shonin application in Japan for approval of its second-generation coronary device and reaching a settlement with the Department of Justice. Going ahead, the company is expected to deliver positive cash flow and profitability in the near future. However, declining SG&A and R&D expenses might be indicative of the reduced efforts on the company’s part to improve sales performance at its fullest, which is a concern.
Zacks Rank & Other Key Picks
Cardiovascular Systems currently has a Zacks Rank #2 (Buy). Other well poised medical stocks worth a look are IDEXX Laboratories, Inc. (IDXX - Free Report) , Masimo Corporation (MASI - Free Report) and Natus Medical Inc. . All three stocks sport a Zacks Rank #1 (Strong Buy).
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Cardiovascular Systems (CSII) Loss Narrows Y/Y in Q4
Cardiovascular Systems Inc. reported a fourth-quarter fiscal 2016 loss per share of 15 cents, reflecting an improvement of 44.4% from the year-ago quarter’s loss. The loss reported was narrower than the Zacks Consensus Estimate of a loss of 20 cents by 25%.
Per management, the year-over-year improvement in the loss figure was primarily driven by a decline in operating expenses on account of the company’s cost realignment actions, including a reduction in force of about 8% on Mar 31, 2016.
In fiscal 2016, the company’s loss per share was $1.72, narrower than the previous fiscal’s loss by 65.4%. The loss was, however, wider than the Zacks Consensus Estimate of a loss of $1.77 by 2.8%.
Quarter in Details
Cardiovascular Systems delivered better-than-expected revenues of $48.5 million in the fiscal fourth quarter, almost flat year over year, but comfortably ahead of the Zacks Consensus Estimate of $46 million.
Per management, the strong top-line performance exhibited the company’s efforts to stabilize and support its field sales representatives.
During the reported quarter, Cardiovascular sold over 14,500 devices and added 48 new peripheral accounts and 62 coronary accounts. Coronary device revenues improved 20% to $11.4 million, while peripheral device revenues declined 5% to $37.1 million. Other product revenues declined 27.3% year over year to $4 million due to the termination of an agreement to distribute Asahi guide wires on Jun 30, 2015. Customer reorder revenues were strong at 98% of total revenue, comparing favorably with the fourth quarter of the last fiscal (96%).
In fiscal 2016, the company generated revenues of $178.2 million, down 1.9% year over year. The top-line figure, however, beat the Zacks Consensus Estimate of $176 million.
CARDIOVASCLR SY Price, Consensus and EPS Surprise
CARDIOVASCLR SY Price, Consensus and EPS Surprise | CARDIOVASCLR SY Quote
Margin
Gross margin in the reported quarter was 79.7%, up 210 basis points (bps) year over year, primarily on account of unit cost reductions.
Meanwhile, selling and administrative (SG&A) expenses dropped 1.9% to $37.6 million, while research and development (R&D) expenses dropped 24.2% to $6 million. The resultant adjusted operating expenses dropped 5.8% to $43.6 million; mainly exhibiting management’s cost realignment initiatives. Consequently, operating loss improved more than 40% to $5 million.
Financial position
The company’s cash and cash equivalents were $60.6 million at the end of fiscal 2016, compared with $83.8 million as of Jun 30, 2015.
Outlook
Cardiovascular Systems has provided its first-quarter fiscal 2017 guidance. The company expects revenues in the range of $48–$49.5 million. The current Zacks Consensus Estimate for first-quarter fiscal 2017 revenues stands at $49 million, almost in line with the upper end of the company’s guidance.
Moreover, the company expects gross margin of 80% in the fiscal first quarter.
The company expects to incur a net loss in the range of $5.8–$6.7 million or loss per share of 18–21 cents, assuming 32.8 million average shares outstanding. The current Zacks Consensus Estimate is at a loss of 20 cents.
Our Take
Cardiovascular Systems ended fiscal 2016 on a promising note. While the company’s fiscal fourth-quarter loss was narrower than the Zacks Consensus Estimate, the top line also comfortably surpassed the mark. Besides, the company’s lower operating expense was the vital factor that drove the year-over-year improvement in the loss figure. Strong revenue performance also contributed to the improved loss outcome.
Moreover, in the fiscal fourth quarter, Cardiovascular Systems delivered two important milestones, including submission of Shonin application in Japan for approval of its second-generation coronary device and reaching a settlement with the Department of Justice. Going ahead, the company is expected to deliver positive cash flow and profitability in the near future. However, declining SG&A and R&D expenses might be indicative of the reduced efforts on the company’s part to improve sales performance at its fullest, which is a concern.
Zacks Rank & Other Key Picks
Cardiovascular Systems currently has a Zacks Rank #2 (Buy). Other well poised medical stocks worth a look are IDEXX Laboratories, Inc. (IDXX - Free Report) , Masimo Corporation (MASI - Free Report) and Natus Medical Inc. . All three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>