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Surmodics (SRDX) Q4 Earnings and Revenues Top Estimates
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Surmodics, Inc. (SRDX - Free Report) delivered an adjusted loss per share of 26 cents in the fiscal fourth quarter of 2022, which is wider than the year-ago quarter’s loss of 10 cents per share. However, the figure was narrower than the Zacks Consensus Estimate of a loss of 38 cents per share.
Our projection of loss per share was 39 cents.
GAAP loss per share for the quarter was $1.06, wider than the year-earlier loss of 2 cents per share.
Full-year adjusted loss per share was at 95 cents, against the earnings per share (EPS) of 37 cents at the end of fiscal 2021. The metric compares with the Zacks Consensus Estimate of a loss of $1.08 per share.
Our projection of adjusted loss per share for fiscal 2022 was also $1.08.
Revenues in Detail
Surmodics registered revenues of $25.9 million in the fiscal fourth quarter, up 8.4% year over year. The figure surpassed the Zacks Consensus Estimate by 4.6%.
The fourth-quarter revenue compares to our estimate of $24.7 million.
The top line was boosted by solid year-over-year product sales growth from the Medical Device business.
Full-year revenues were $99.9 million, reflecting a 4.9% decline from the comparable period of fiscal 2021. The metric topped the Zacks Consensus Estimate by 1.2%.
The fiscal full-year revenue compares to our estimate of $98.7 million.
Segmental Analysis
Surmodics operates via two reportable segments — Medical Device and In-Vitro Diagnostics (IVD).
In the reported quarter, sales at the Medical Device segment summed $19.5 million, up 12.1% from the year-ago quarter. Per management, stronger-than-expected product sales (including sales of Pounce and Sublime products) and licensing fee revenue significantly drove the segment.
This figure compares to our Medical Device fiscal fourth-quarter revenue projection of $17.7 million.
In the quarter under review, IVD sales declined by 1.3% to $ 6.5 million.
This figure compares to our IVD fiscal fourth-quarter revenue projection of $7 million.
The company also derives revenues from three primary sources — Product sales, Royalties and license fees, and Research, development and other fees.
In the quarter under review, Product sales were $14.4 million, up 15.1% from the prior-year quarter. Royalties and license fees revenues totaled $9.5 million, up 7.2% from the prior-year quarter. Research, development and other revenues were $2.1 million, down 19.5% year over year.
In the quarter under review, Surmodics’ gross profit rose 2.9% to $20.4 million. Gross margin contracted 419 basis points (bps) to 78.5%.
We had projected 63.9% of gross margin for the fiscal fourth-quarter.
Selling, general & administrative expenses rose 75.2% to $13.8 million. Research and development expenses went up 14.2% year over year to $12.3 million. Adjusted operating expenses of $26 million rose 40% year over year.
Adjusted operating loss totaled $5.6 million against the prior-year quarter’s adjusted operating income of $1.2 million.
Financial Position
Surmodics exited fiscal 2022 with cash and cash equivalents of $18.9 million compared with $31.2 million at the end of fiscal 2021. The company ended fiscal 2022 with short-term debt of $10 million, unchanged from that at the end of fiscal 2021.
Cumulative net cash used in operating activities at the end of fiscal 2022 was $17.2 million against net cash provided by operating activities of $15.4 million a year ago.
Fiscal 2023 Guidance
Surmodics has issued its full-year financial outlook.
The company projects fiscal year revenues to be within the range of $103 million-$107 million, reflecting an uptick of 3-7% over the comparable prior-year period. The Zacks Consensus Estimate for the same is currently pegged at $132.8 million.
Adjusted diluted loss per share for fiscal 2023 is expected within the range of $2.54-$2.14. The Zacks Consensus Estimate for the same is currently pegged at an EPS of 38 cents.
Our Take
Surmodics exited the fourth quarter of fiscal 2022 with better-than-expected results. The company registered robust revenues from its Medical Device segment, as well as from its Product sales, and royalties and license fees. Surmodics confirmed making crucial progress with respect to the initial commercialization of its Pounce arterial thrombectomy, SurVeil drug-coated balloon (DCB) and Sublime radial platforms during the reported quarter. Recent announcements of favorable data from its SWING first-in-human study of its Sundance Sirolimus DCB (in October) and TRANSCEND clinical trial of SurVeil DCB (in November) raise our optimism about the stock.
However, the company’s dismal year-over-year bottom-line results in the fiscal fourth quarter are concerning. Lower revenues from the IVD segment, as well as decline in research, development and other revenues are discouraging. The gross margin contraction also does not bode well for the stock. Surmodics continued to incur operating losses in the reported quarter, which further raises our apprehension.
Zacks Rank and Key Picks
Surmodics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. (AMN - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $2.57, which beat the Zacks Consensus Estimate by 10.3%. Revenues of $1.14 billion outpaced the consensus mark by 3.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average being 10.9%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Surmodics (SRDX) Q4 Earnings and Revenues Top Estimates
Surmodics, Inc. (SRDX - Free Report) delivered an adjusted loss per share of 26 cents in the fiscal fourth quarter of 2022, which is wider than the year-ago quarter’s loss of 10 cents per share. However, the figure was narrower than the Zacks Consensus Estimate of a loss of 38 cents per share.
Our projection of loss per share was 39 cents.
GAAP loss per share for the quarter was $1.06, wider than the year-earlier loss of 2 cents per share.
Full-year adjusted loss per share was at 95 cents, against the earnings per share (EPS) of 37 cents at the end of fiscal 2021. The metric compares with the Zacks Consensus Estimate of a loss of $1.08 per share.
Our projection of adjusted loss per share for fiscal 2022 was also $1.08.
Revenues in Detail
Surmodics registered revenues of $25.9 million in the fiscal fourth quarter, up 8.4% year over year. The figure surpassed the Zacks Consensus Estimate by 4.6%.
The fourth-quarter revenue compares to our estimate of $24.7 million.
The top line was boosted by solid year-over-year product sales growth from the Medical Device business.
Full-year revenues were $99.9 million, reflecting a 4.9% decline from the comparable period of fiscal 2021. The metric topped the Zacks Consensus Estimate by 1.2%.
The fiscal full-year revenue compares to our estimate of $98.7 million.
Segmental Analysis
Surmodics operates via two reportable segments — Medical Device and In-Vitro Diagnostics (IVD).
In the reported quarter, sales at the Medical Device segment summed $19.5 million, up 12.1% from the year-ago quarter. Per management, stronger-than-expected product sales (including sales of Pounce and Sublime products) and licensing fee revenue significantly drove the segment.
This figure compares to our Medical Device fiscal fourth-quarter revenue projection of $17.7 million.
In the quarter under review, IVD sales declined by 1.3% to $ 6.5 million.
This figure compares to our IVD fiscal fourth-quarter revenue projection of $7 million.
The company also derives revenues from three primary sources — Product sales, Royalties and license fees, and Research, development and other fees.
In the quarter under review, Product sales were $14.4 million, up 15.1% from the prior-year quarter. Royalties and license fees revenues totaled $9.5 million, up 7.2% from the prior-year quarter. Research, development and other revenues were $2.1 million, down 19.5% year over year.
Surmodics, Inc. Price, Consensus and EPS Surprise
Surmodics, Inc. price-consensus-eps-surprise-chart | Surmodics, Inc. Quote
Margin Trend
In the quarter under review, Surmodics’ gross profit rose 2.9% to $20.4 million. Gross margin contracted 419 basis points (bps) to 78.5%.
We had projected 63.9% of gross margin for the fiscal fourth-quarter.
Selling, general & administrative expenses rose 75.2% to $13.8 million. Research and development expenses went up 14.2% year over year to $12.3 million. Adjusted operating expenses of $26 million rose 40% year over year.
Adjusted operating loss totaled $5.6 million against the prior-year quarter’s adjusted operating income of $1.2 million.
Financial Position
Surmodics exited fiscal 2022 with cash and cash equivalents of $18.9 million compared with $31.2 million at the end of fiscal 2021. The company ended fiscal 2022 with short-term debt of $10 million, unchanged from that at the end of fiscal 2021.
Cumulative net cash used in operating activities at the end of fiscal 2022 was $17.2 million against net cash provided by operating activities of $15.4 million a year ago.
Fiscal 2023 Guidance
Surmodics has issued its full-year financial outlook.
The company projects fiscal year revenues to be within the range of $103 million-$107 million, reflecting an uptick of 3-7% over the comparable prior-year period. The Zacks Consensus Estimate for the same is currently pegged at $132.8 million.
Adjusted diluted loss per share for fiscal 2023 is expected within the range of $2.54-$2.14. The Zacks Consensus Estimate for the same is currently pegged at an EPS of 38 cents.
Our Take
Surmodics exited the fourth quarter of fiscal 2022 with better-than-expected results. The company registered robust revenues from its Medical Device segment, as well as from its Product sales, and royalties and license fees. Surmodics confirmed making crucial progress with respect to the initial commercialization of its Pounce arterial thrombectomy, SurVeil drug-coated balloon (DCB) and Sublime radial platforms during the reported quarter. Recent announcements of favorable data from its SWING first-in-human study of its Sundance Sirolimus DCB (in October) and TRANSCEND clinical trial of SurVeil DCB (in November) raise our optimism about the stock.
However, the company’s dismal year-over-year bottom-line results in the fiscal fourth quarter are concerning. Lower revenues from the IVD segment, as well as decline in research, development and other revenues are discouraging. The gross margin contraction also does not bode well for the stock. Surmodics continued to incur operating losses in the reported quarter, which further raises our apprehension.
Zacks Rank and Key Picks
Surmodics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. (AMN - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $2.57, which beat the Zacks Consensus Estimate by 10.3%. Revenues of $1.14 billion outpaced the consensus mark by 3.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average being 10.9%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.