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Cardiovascular Systems' (CSII) Q1 Earnings Top Estimates

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Cardiovascular Systems, Inc. (CSII - Free Report) reported loss per share of 5 cents for first-quarter fiscal 2021, narrower than the loss per share of 17 cents in the prior-year period. The reported loss was also narrower than the Zacks Consensus Estimate of a loss of 23 cents.

Net Sales

Cardiovascular Systems’ revenues of $60.5 million declined 6.1% year over year. However, the top line exceeded the Zacks Consensus Estimate by 7.6%.

Although the fiscal first-quarter revenues declined, it improved 42% sequentially primarily due to strong sequential growth in peripheral and coronary segments in the United States.

Segment Details

In the quarter under review, global Coronary device revenues decreased 7% year over year to $17.6 million. Domestic coronary revenues declined 2% from the year-ago period despite gradual recovery in atherectomy unit volumes.

Global peripheral device revenues decreased 6% to $42.9 million. Domestically, peripheral unit volumes decreased 5%.

Total U.S. revenues declined 4% to $58.8 million, while International revenues totaled around $1.7 million, a 42% decline due to adverse impacts from the pandemic.

Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise

 

Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise

Cardiovascular Systems, Inc. price-consensus-eps-surprise-chart | Cardiovascular Systems, Inc. Quote

Margin

Gross margin in the reported quarter was 79.2%, down 110 basis points (bps) year over year due to 7.4% fall in gross profit.

Meanwhile, selling, general and administrative expenses were down 13.8% to $40.3 million. Research and development expenses declined 15.9% to $9.1 million.

Operating expenses declined 14.2% to $49.3 million. Operating loss in the reported quarter was $1.4 million compared with operating loss of $5.7 million in the year-ago period.

Financial Position

The company exited the first quarter of fiscal 2021 with cash and cash equivalents of $92.7 million, compared with $185.5 million at the end of fiscal 2020.

Q2 Fiscal 2021 Guidance

Cardiovascular Systems, boosted by the improvement in domestic procedure volumes during first quarter, has provided the financial guidance for the second quarter of fiscal 2021.

Revenues are expected in the band of $63-$67 million, indicating sequential revenue growth of 4-11%.

Gross margin is expected in the range of 78-79%. The company expects to incur operating expenses in the range of $52-$54 million.

Our Take

Cardiovascular Systems exited first quarter of fiscal 2021 with better-than-expected results. Although the company reported a decline in the fiscal first-quarter top line, sequential uptick in revenues buoys optimism. Gradual recovery in atherectomy procedure volumes drove domestic revenues in fiscal first quarter, which is impressive. The peripheral revenues performed better than expected as hospital-based critical limb ischemia programs remained active throughout the quarter. The company providing its financial outlook for fiscal second quarter despite the pandemic-led unstable business environment looks encouraging.

However, the company’s dismal bottom-line performance for the reported quarter is concerning. Dismal global segmental performance and gross margin contraction is deterring.

Zacks Rank and Key Picks

Cardiovascular Systems currently carries a Zacks Rank #3 (Hold).

Some other better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Align Technology, Inc. (ALGN - Free Report) .

West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher, a Zacks Rank #2 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently carries a Zacks Rank #2.

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