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Cardiovascular Systems (CSII) Q1 Loss Lower than Expected
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Cardiovascular Systems Inc. reported loss per share of 6 cents in first-quarter fiscal 2017, reflecting a massive improvement from the year-ago quarter’s loss of 41 cents. Also, the loss reported was significantly narrower than the Zacks Consensus Estimate of a loss of 18 cents.
Per management, the year-over-year improvement in the loss figure was primarily backed by revenue growth, better gross margin and lower operating expenses on account of the company’s cost realignment actions.
Quarter in Details
Cardiovascular Systems delivered better-than-expected revenues of $49.8 million in the fiscal first quarter, marking a year-over-year increase of 14%. Revenues were almost in line with the Zacks Consensus Estimate of $50 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 14,700 devices generating 92% of revenues. The company added 40 new peripheral accounts and 52 coronary accounts.
Coronary device revenues improved 33% year over year to $11.6 million, while peripheral device revenues rose 9% to $38.2 million. Other product revenues increased 20.1% year over year to $3.9 million. Customer reorder revenues were strong at 98% of total revenue.
Margin
Gross margin in the reported quarter was 80.9%, up 99 basis points year over year, primarily on account of unit cost reductions and slightly higher device ASPs.
Meanwhile, selling and administrative (SG&A) expenses dropped 10.9% to $36.9 million, while research and development (R&D) expenses fell 23.1% to $5.3 million. The resultant adjusted operating expenses declined 12.7% to $42.2 million, primarily exhibiting management’s cost realignment initiatives and timing of studies and projects. Consequently, operating loss narrowed to $1.9 million from a loss of $13.2 million a year ago.
Financial position
The company’s cash and cash equivalents were $58.2 million at the end of first-quarter fiscal 2017, compared with $60.6 million at the end of fiscal 2016.
Outlook
Cardiovascular Systems has provided its second-quarter fiscal 2017 guidance. The company expects revenues in the range of $49–$50 million. The current Zacks Consensus Estimate for second-quarter fiscal 2017 revenues stands at $50.9 million, ahead of the upper end of the company’s guidance.
Moreover, the company expects gross margin of 81% in the fiscal second quarter, flat sequentially.
The company expects to incur a net loss in the range of $1.7–$2.3 million or loss per share of 5–7 cents, assuming 33 million average shares outstanding. The current Zacks Consensus Estimate is at a loss of 15 cents, wider than the guidance range.
Our Take
Cardiovascular Systems kick-started fiscal 2017 on a promising note. While the company’s fiscal first-quarter net loss was narrower than the Zacks Consensus Estimate, the top line met the mark. Additionally, 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. According to the company, this result marked the third consecutive quarter of financial improvement, demonstrating significant progress toward its goal of driving attractive revenue growth, while moving toward positive cash flow and profitability.
Moreover, Cardiovascular Systems delivered an important milestone. Recently, it has presented the 30-day favorable results from its LIBERTY 360° study in a late-breaking presentation at the 2016 Amputation Prevention Symposium (AMP) in Chicago. The results demonstrated high rates of procedural lesion treatment success and freedom from MAE, as well as quality of life improvements, across all Rutherford classes including challenging Rutherford 6 patients.
Zacks Rank & Key Picks
Cardiovascular Systems currently has a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space include GW Pharmaceuticals plc , Quidel Corp. (QDEL - Free Report) and Baxter International Inc. (BAX - Free Report) . GW Pharmaceuticals sports a Zacks Rank #1 (Strong Buy), while Quidel and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GW Pharmaceuticals surged 69.6% year to date compared to the S&P 500’s 4.67% over the same period. The company’s four-quarter average earnings surprise is 41.7%.
Quidel rallied 23.5% in the past one year, higher than the S&P 500’s 2.35%. Over the next five years, the stock is estimated to record an earnings growth rate of 20%, higher than the industry average of 15.1%.
Baxter’s shares soared 24.4% year to date. Over the next five years, the stock is expected to see 12.3% earnings growth. It has a trailing four-quarter average earnings surprise of 27%.
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Cardiovascular Systems (CSII) Q1 Loss Lower than Expected
Cardiovascular Systems Inc. reported loss per share of 6 cents in first-quarter fiscal 2017, reflecting a massive improvement from the year-ago quarter’s loss of 41 cents. Also, the loss reported was significantly narrower than the Zacks Consensus Estimate of a loss of 18 cents.
Per management, the year-over-year improvement in the loss figure was primarily backed by revenue growth, better gross margin and lower operating expenses on account of the company’s cost realignment actions.
Quarter in Details
Cardiovascular Systems delivered better-than-expected revenues of $49.8 million in the fiscal first quarter, marking a year-over-year increase of 14%. Revenues were almost in line with the Zacks Consensus Estimate of $50 million.
Per management, the strong top-line performance exhibited the company’s efforts to stabilize and support its field sales representatives.
CARDIOVASCLR SY Price, Consensus and EPS Surprise
CARDIOVASCLR SY Price, Consensus and EPS Surprise | CARDIOVASCLR SY Quote
During the reported quarter, Cardiovascular sold over 14,700 devices generating 92% of revenues. The company added 40 new peripheral accounts and 52 coronary accounts.
Coronary device revenues improved 33% year over year to $11.6 million, while peripheral device revenues rose 9% to $38.2 million. Other product revenues increased 20.1% year over year to $3.9 million. Customer reorder revenues were strong at 98% of total revenue.
Margin
Gross margin in the reported quarter was 80.9%, up 99 basis points year over year, primarily on account of unit cost reductions and slightly higher device ASPs.
Meanwhile, selling and administrative (SG&A) expenses dropped 10.9% to $36.9 million, while research and development (R&D) expenses fell 23.1% to $5.3 million. The resultant adjusted operating expenses declined 12.7% to $42.2 million, primarily exhibiting management’s cost realignment initiatives and timing of studies and projects. Consequently, operating loss narrowed to $1.9 million from a loss of $13.2 million a year ago.
Financial position
The company’s cash and cash equivalents were $58.2 million at the end of first-quarter fiscal 2017, compared with $60.6 million at the end of fiscal 2016.
Outlook
Cardiovascular Systems has provided its second-quarter fiscal 2017 guidance. The company expects revenues in the range of $49–$50 million. The current Zacks Consensus Estimate for second-quarter fiscal 2017 revenues stands at $50.9 million, ahead of the upper end of the company’s guidance.
Moreover, the company expects gross margin of 81% in the fiscal second quarter, flat sequentially.
The company expects to incur a net loss in the range of $1.7–$2.3 million or loss per share of 5–7 cents, assuming 33 million average shares outstanding. The current Zacks Consensus Estimate is at a loss of 15 cents, wider than the guidance range.
Our Take
Cardiovascular Systems kick-started fiscal 2017 on a promising note. While the company’s fiscal first-quarter net loss was narrower than the Zacks Consensus Estimate, the top line met the mark. Additionally, 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. According to the company, this result marked the third consecutive quarter of financial improvement, demonstrating significant progress toward its goal of driving attractive revenue growth, while moving toward positive cash flow and profitability.
Moreover, Cardiovascular Systems delivered an important milestone. Recently, it has presented the 30-day favorable results from its LIBERTY 360° study in a late-breaking presentation at the 2016 Amputation Prevention Symposium (AMP) in Chicago. The results demonstrated high rates of procedural lesion treatment success and freedom from MAE, as well as quality of life improvements, across all Rutherford classes including challenging Rutherford 6 patients.
Zacks Rank & Key Picks
Cardiovascular Systems currently has a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space include GW Pharmaceuticals plc , Quidel Corp. (QDEL - Free Report) and Baxter International Inc. (BAX - Free Report) . GW Pharmaceuticals sports a Zacks Rank #1 (Strong Buy), while Quidel and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GW Pharmaceuticals surged 69.6% year to date compared to the S&P 500’s 4.67% over the same period. The company’s four-quarter average earnings surprise is 41.7%.
Quidel rallied 23.5% in the past one year, higher than the S&P 500’s 2.35%. Over the next five years, the stock is estimated to record an earnings growth rate of 20%, higher than the industry average of 15.1%.
Baxter’s shares soared 24.4% year to date. Over the next five years, the stock is expected to see 12.3% earnings growth. It has a trailing four-quarter average earnings surprise of 27%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>