Total Revenues Increase 23 Percent Over
Prior Year; Medical Up 33 Percent; Company Posts Strong Income from
Continuing Operations
IntriCon Corporation (NASDAQ:IIN), a designer, developer,
manufacturer and distributor of miniature and micro-miniature
body-worn devices, today announced financial results for its first
quarter ended March 31, 2014.
First Quarter Highlights:
- Net sales of $17.3 million represented
the strongest quarter in more than five years;
- Gross margins of 27.6 percent rose from
25.5 percent in the sequential 2013 fourth quarter and 26.7 percent
in the prior-year period;
- IntriCon achieved income from
continuing operations of $787,000, a significant increase from
$135,000 in the sequential 2013 fourth-quarter and a net loss of
$23,000 in the prior year period;
- The company reduced bank debt $962,000
during the first quarter, and;
- Significant progress was made in
building infrastructure to support IntriCon’s value hearing health
initiatives.
First-Quarter Financial ResultsFor the 2014 first
quarter, the company reported net sales of $17.3 million, a 22.5
percent increase from $14.1 million in the prior-year period.
IntriCon had net income of $517,000, or $0.09 per diluted share,
compared to a net loss of $471,000, or $0.08 per diluted share, for
the 2013 first quarter.
The company reported net income from continuing operations of
$787,000, or $0.14 per diluted share, in the 2014 first quarter
versus a net loss of $23,000, or $0.00 per diluted share, in the
prior-year period. Results from discontinued operations in the 2014
first quarter were a net loss of $270,000, or $0.05 per diluted
share, versus a net loss of $448,000, or $0.08 per diluted share,
in the prior-year period. Included in the 2014 first-quarter
discontinued operations net loss was a loss of $120,000, or $0.02
per diluted share, from the sale of IntriCon Tibbetts Corporation,
the company’s wholly owned subsidiary based in Camden, Maine.
“We are very pleased with our first-quarter performance—we
delivered double-digit top-line gains across all of our businesses
and returned to profitability,” said Mark S. Gorder, president and
chief executive officer of IntriCon. “With our restructuring plan
behind us and its significant cost reductions, we’re focused on
driving business with our key medical and hearing health customers,
and pursuing our highest potential growth opportunities: value
hearing health and medical biotelemetry.
“For the third consecutive quarter we recorded sequential growth
in sales, gross profit margins and profitability from continuing
operations. Once again, the strong rise in our medical business
stemmed from the continuing ramp of Medtronic’s 530G insulin pump
system. Additionally, we saw increased order activity from hi
HealthInnovations, and we anticipate measured increases for the
remainder of the year to meet demand.”
Gross profit margins increased to 27.6 percent from 26.7 percent
for the prior-year first quarter, and also rose sequentially from
25.5 percent in the 2013 fourth quarter. The gains were primarily
due to volume increases and cost reductions generated from the
global restructuring plan, partially offset by a less favorable
sales mix.
Business UpdateSales in IntriCon’s medical business rose
33 percent in the 2014 first quarter compared to the year-ago
period. As previously disclosed, IntriCon’s largest customer,
Medtronic, received FDA approval for their MiniMed 530G insulin
pump in September 2013. IntriCon expects medical sales to remain
strong in 2014 as Medtronic fulfills marketplace demand for the
MiniMed 530G.
Hearing health sales also grew during the quarter, rising 12
percent from the prior-year quarter chiefly due to strong device
sales, including those into the personal sound amplifier products
(PSAP) channel. Additionally, the company saw solid growth in
hearing aid device sales to hi HealthInnovations.
Said Gorder, “As we’ve noted previously, sales growth within the
conventional hearing health channel continues to be hampered by
high device costs, distribution inconveniences and retail
consolidation. We believe that there’s significant opportunity in
alternative care models such as the value hearing aid channel and
PSAP channel. And to capitalize on these opportunities, we continue
to concentrate efforts in the value hearing health space and we’re
aggressively pursuing larger customers.”
Professional audio sales rose 12 percent from the prior-year
period. IntriCon will continue to leverage its core technology in
professional audio to support existing customers, as well as pursue
related hearing health and medical product opportunities.
Looking AheadConcluded Gorder, “With a return to
profitability and a favorable outlook from our major customers,
we’re on track to continue to deliver strong performance in 2014.
Our targeted focus going forward is aggressively driving our two
largest growth opportunities: value hearing health and medical
biotelemetry. Over the coming months, we will continue to build the
necessary infrastructure to support our value hearing health
initiative, ultimately positioning IntriCon to secure large
opportunities in the marketplace.”
Conference Call TodayAs previously announced, the company
will hold an investment community conference call today, Monday,
April 21, 2014, beginning at 4:00 p.m. CT. Mark Gorder, president
and chief executive officer, and Scott Longval, chief financial
officer, will review first-quarter performance and discuss the
company’s strategies. To join the conference call, dial:
1-888-523-1225 and provide the conference ID number 9707055 to the
operator.
A replay of the conference call will be available three hours
after the call ends through 7:00 p.m. CT on Monday, May 5, 2014. To
access the replay, dial 1-888-203-1112 and enter passcode:
9707055.
About IntriCon CorporationHeadquartered in Arden Hills,
Minn., IntriCon Corporation designs, develops and manufactures
miniature and micro-miniature body-worn devices. These advanced
products help medical, healthcare and professional communications
companies meet the rising demand for smaller, more intelligent and
better connected devices. IntriCon has facilities in the United
States, Asia and Europe. The company’s common stock trades under
the symbol “IIN” on the NASDAQ Global Market. For more information
about IntriCon, visit www.intricon.com.
Forward-Looking StatementsStatements made in this release
and in IntriCon’s other public filings and releases that are not
historical facts or that include forward-looking terminology are
“forward-looking statements” within the meaning of the Securities
Exchange Act of 1934, as amended. These forward-looking statements
may be affected by known and unknown risks, uncertainties and other
factors that are beyond IntriCon’s control, and may cause
IntriCon’s actual results, performance or achievements to differ
materially from the results, performance and achievements expressed
or implied in the forward-looking statements. These risks,
uncertainties and other factors are detailed from time to time in
the company’s filings with the Securities and Exchange Commission,
including the Annual Report on Form 10-K for the year ended
December 31, 2013. The company disclaims any intent or obligation
to publicly update or revise any forward-looking statements,
regardless of whether new information becomes available, future
developments occur or otherwise.
INTRICON CORPORATION Consolidated Condensed
Statements of Operations (In Thousands, Except Per Share
Amounts) Three Months Ended March
31, March 31, 2014 2013
(Unaudited)
(Unaudited)
Sales, net $ 17,310 $ 14,126 Cost of sales 12,537
10,357 Gross profit 4,773 3,769
Operating expenses: Sales and marketing 1,007 892 General and
administrative 1,624 1,560 Research and development 1,168 1,229
Restructuring charges 83 - Total
operating expenses 3,882 3,681
Operating income 891 88 Interest expense (138 ) (153 )
Equity in (loss) of partnerships (49 ) (58 ) Other income
109 90 Income (loss) from continuing
operations before income taxes and discontinued operations 813 (33
) Income tax expense 26 (10 ) Income
(loss) before discontinued operations 787 (23 ) Loss on sale of
discontinued operations (120 ) - Loss from discontinued operations,
net of income taxes (150 ) (448 ) Net income (loss) $
517 $ (471 ) Basic income (loss) per share:
Continuing operations $ 0.14 $ (0.00 ) Discontinued operations
(0.05 ) (0.08 ) Net income (loss) per share: $ 0.09
$ (0.08 ) Diluted income (loss) per share: Continuing
operations $ 0.14 $ (0.00 ) Discontinued operations (0.05 )
(0.08 ) Net income (loss) per share: $ 0.09 $ (0.08 )
Average shares outstanding: Basic 5,729 5,687 Diluted 5,859
5,687
INTRICON CORPORATION Consolidated
Condensed Balance Sheets (In Thousands, Except Per Share
Amounts) March 31, December
31,
2014
2013
(Unaudited) Current assets: Cash $ 576 $ 217 Restricted cash
697 568 Accounts receivable, less allowance for doubtful accounts
of $124 at March 31, 2014 and $124 at December 31, 2013 6,529 5,433
Inventories 9,680 9,400 Other current assets 1,064 1,337 Current
assets of discontinued operations - 382
Total current assets 18,546 17,337 Machinery and equipment
34,130 33,971 Less: Accumulated depreciation 29,680
29,232 Net machinery and equipment 4,450 4,739
Goodwill 9,194 9,194 Investment in partnerships 533 569 Other
assets, net 668 749 Other assets of discontinued operations
- 132 Total assets $ 33,391 $ 32,720
Current liabilities: Checks written in excess of cash
$ 457 $ 279 Current maturities of long-term debt 2,312 2,210
Accounts payable 5,581 5,037 Accrued salaries, wages and
commissions 2,117 1,676 Deferred gain 110 110 Other accrued
liabilities 1,920 1,893 Liabilities of discontinued operations
- 154 Total current liabilities 12,497
11,359 Long-term debt, less current maturities 5,207 6,271
Other postretirement benefit obligations 519 531 Accrued pension
liabilities 815 839 Deferred gain 138 165 Other long-term
liabilities 205 247 Total liabilities
19,381 19,412 Commitments and contingencies Shareholders’ equity:
Common stock, $1.00 par value per share; 20,000 shares authorized;
5,738 and 5,727 shares issued and outstanding at March 31, 2014 and
December 31, 2013, respectively 5,738 5,727 Additional paid-in
capital 16,588 16,434 Accumulated deficit (8,005 ) (8,522 )
Accumulated other comprehensive loss (311 ) (331 )
Total shareholders' equity 14,010 13,308
Total liabilities and shareholders’ equity $ 33,391 $
32,720
At IntriCon:Scott Longval, CFO,
651-604-9526slongval@intricon.comorAt PadillaCRT:Matt Sullivan,
612-455-1709matt.sullivan@padillacrt.com
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