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SurModics Reports In-Line EPS


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SurModics Inc.’s (SRDX - Analyst Report) first quarter fiscal 2012 (ended December 31, 2011) earnings from continued operations (excluding special items) of 11 cents per share were in line with the Zacks Consensus Estimate. The company earned 8 cents per share on an adjusted basis in the year-ago quarter. Higher year over year earnings were primarily attributable to increased adjusted revenues.

Quarter in Details

Adjusted revenues climbed 13.6% year over year to $11.73 million in the reported quarter, just shy of the Zacks Consensus Estimate of $12 million. Revenues on a reported basis (including special items) were, however, down 4.8% to approximately $11.92 million in the first quarter of fiscal 2012.

Reported revenues at SurModics were hurt primarily by the decline in royalty revenues from Johnson & Johnson (JNJ - Analyst Report) pertaining to Cypher and Cypher Select Plus drug eluting stents. Johnson & Johnson has stopped manufacturing the products from the end of calendar 2011.

For the reported quarter, royalties and license fees accounted for approximately 54.8% of total adjusted revenue with product sales and research & development accounting for 39.5% and 5.7%, respectively.

SurModics operates through two business units: Medical Devices and In Vitro Diagnostics following the sale of the assets of the Pharmaceuticals division to Germany’s Evonik Industries AG for $30 million cash in November 2011. Consequently, the results of the Pharmaceuticals division were reported as discontinued in the reported quarter.

SurModics’ reported revenues from the Medical Devices segment were $8.9 million, down 9.8%. The reduction was primarily attributable to the decline in royalty revenues from the sale of Cordis Cypher and Cypher Select Plus stents. Reported revenues from the In Vitro Diagnostics unit increased 13.5% to $3 million. Performance of the segment was aided by higher demand.

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