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Cardiovascular Systems (CSII) Beats on Q4 Earnings & Revenues

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Cardiovascular Systems, Inc. (CSII - Free Report) reported earnings per share (EPS) of 11 cents in fourth-quarter fiscal 2018 compared with the year-ago 2 cents.

The figure came in higher than the guided range of 5 cents to 8 cents. Moreover, the EPS figure trumped the Zacks Consensus Estimate of 6 cents.

Full-year adjusted EPS came in at 5 cents, comparing favorably with the year-ago loss of 6 cents. Also, the figure beat the Zacks Consensus Estimate of a breakeven.

Net Sales

Cardiovascular Systems recorded revenues of $59.2 million in the fiscal fourth quarter, marking an 11.9% year-over-year increase. Also, the metric was above the guided range of $57.5-$59 million. The top line steered past the Zacks Consensus Estimate of $58.4 million.

Fiscal 2018 revenues of $217 million were up 5.9% from the year-ago figure. Also, revenues outpaced the Zacks Consensus Estimate of $216.4 million.

Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise

 

Segment Details

Coronary device revenues increased 22% year over year to $16.1 million. Meanwhile, peripheral device revenues rose 8.3% to $43.1 million on a year-over-year basis. The company continued to see strength in its orbital atherectomy systems which were used in the treatment of over 67,000 patients in fiscal 2018.

Margin

Gross margin in the reported quarter was 81.6%, down 10 basis points (bps) year over year.

Meanwhile, selling and administrative (SG&A) expenses rose 5.3% to $37.8 million while research and development (R&D) expenses were up 6.3% to $6.7 million. As a result, adjusted operating expenses expanded 5.7% to $44.6 million.

Operating income was around $3.8 million compared with operating income of $1 million in the year-ago quarter. Further, operating margin came in at 6.4%, up 450 bps from the year-ago figure.

Financial position

The company exited fiscal 2018 with cash and cash equivalents of $116.3 million, compared with $107.9 million at the end of fiscal 2017.

Outlook

Cardiovascular Systems issued its fiscal 2019 guidance. The company expects revenues in the range of $240-$250 million for fiscal 2019. The current Zacks Consensus Estimate for fiscal 2019 revenues is pegged at $240.2 million, near the low end of the company's guidance.

Moreover, the company expects gross profit to account for 80% of revenues in fiscal 2019.

The company expects to incur net loss of 1-2% of revenues in fiscal 2019. The current Zacks Consensus Estimate for earnings is pegged at 12 cents.

Our Take

Cardiovascular Systems exited fourth-quarter fiscal 2018 on a solid note with year-over-year increase in both Coronary device and peripheral device segments. Overall, revenues grew year over year on segmental strength. The company is putting efforts in product innovation through R&D investments.

Further, management seems to be upbeat about the recently-signed exclusive international distribution agreement with OrbusNeich to sell its coronary and peripheral orbital atherectomy systems outside the United States and Japan.

On the flip side, Cardiovascular Systems faces cut-throat competition in the niche space.

Zacks Rank & Key Releases

Cardiovascular Systems has a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the broader medical sector which reported solid results this earnings season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Align Technology, Inc. (ALGN - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Align Technology carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical reported second-quarter 2018 adjusted EPS of $2.76, which beat the Zacks Consensus Estimate of $2.48. Revenues totaled $909.3 million, also surpassing the consensus estimate of $870 million.

Align Technology posted second-quarter 2018 adjusted EPS of $1.30, steering past the Zacks Consensus Estimate of $1.09. Revenues came in at $490.3 million, beating the consensus estimate of $462.9 million.

Chemed reported second-quarter 2018 adjusted EPS of $2.81, which trumped the Zacks Consensus Estimate of $2.68. Revenues of $441.8 million edged past the Zacks Consensus Estimate of $432.3 million.

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