Company Delivers Continued Profitability,
Launches Key Value Hearing Health Initiatives
IntriCon Corporation (NASDAQ: IIN), a designer,
developer, manufacturer and distributor of miniature and
micro-miniature body-worn devices, today announced financial
results for its third quarter ended September 30, 2015.
Highlights:
- Net sales of $17.3 million increased
sequentially and over the prior-year period;
- The company continued to deliver
profitability with net income of $628,000, or $0.10 per diluted
share;
- IntriCon’s Medtronic business posted
record quarterly revenue, rising 30 percent over the 2014 third
quarter;
- The company launched several key
partnerships, including, a joint venture with the Academy of
Doctors of Audiology (ADA), earVenture LLC (earVenture) and a
strategic supplier agreement with AudioNova; and,
- IntriCon recently acquired the assets
of PC Werth Limited, a leading supplier of hearing healthcare
products and equipment to the United Kingdom’s National Health
Service (NHS).
Financial ResultsFor the 2015 third quarter, the company
reported net sales of $17.3 million, compared to $17.0 million in
the prior-year period. IntriCon posted net income of $628,000, or
$0.10 per diluted share, versus net income of $558,000, or $0.09
per diluted share, for the 2014 third quarter.
“We are pleased with our third-quarter performance as we
continue to deliver profitability while concentrating resources on
building the infrastructure required to secure high-potential
growth opportunities, especially in the value hearing health
space,” said Mark S. Gorder, president and chief executive officer
of IntriCon. “We made significant strides in this area during the
quarter, most notably by launching earVenture. This joint venture
is further evidence that the hearing health market is changing and
opportunities exist in various emerging value channels, which we
are well-positioned to address."
Gross profit margins were 26.7 percent compared to 26.3 percent
in the prior-year third quarter. The increase was primarily due to
higher overall sales volumes.
Nine-Month ResultsFor the 2015 nine-month period,
IntriCon reported net sales of $51.1 million and net income of $1.4
million, or $0.23 per diluted share. This compares to 2014
nine-month net sales of $51.8 million and net income of $1.9
million, or $0.31 per diluted share. Included in 2014 nine-month
results was a net loss from discontinued operations of $270,000, or
$0.04 per diluted share.
Gross profit margins decreased to 26.5 percent from 27.1 percent
for the prior-year, nine-month period. The slight decline was
primarily due to product mix and lower overall sales volumes.
Business UpdateHearing health sales declined 17 percent
during the third quarter from the prior-year quarter, primarily due
to decreases in the conventional channel. As previously noted, the
conventional channel has experienced a trend of continuing market
consolidation. As a result, the six large manufacturers now control
approximately 98 percent of the global market. However, during this
time market penetration has stagnated as end-consumer prices have
drastically increased. While conventional hearing health sales are
down from the prior year, IntriCon remains focused on building the
infrastructure required to secure other notable partners who can
benefit from the company’s outcomes-based hearing health model
offering. “We anticipate these initiatives will drive robust
hearing health growth in future quarters,” according to Gorder.
Continued Gorder, “earVenture is a testament to the emerging
value channels that we believe have significant growth potential.
It capitalizes on IntriCon's established reputation as a leading
provider of high-quality, low-cost hearing aids and the ADA's
respected position as the only national membership association
focused on ownership of the audiology profession through autonomous
practice and clinical excellence. Initial earVenture product
offerings will help audiologists compete in any market and help
underserved or never-served populations who can benefit from
hearing aids.
“In addition, with our recently announced acquisition of PC
Werth Limited, IntriCon gained direct access to the NHS and greater
control over our efforts to accelerate new market penetration to
serve the United Kingdom’s sizable hearing health needs.”
According to Gorder, the transaction will require various NHS
contracts to be novated, which the company anticipates completing
in 2015. The NHS is widely seen as the most efficient hearing aid
delivery system in the world, supplying an estimated 1.4 million
hearing aids annually.
Sales in IntriCon’s medical business increased 28 percent in the
2015 third quarter from the prior-year quarter, primarily driven by
IntriCon’s largest customer, Medtronic. For the second consecutive
quarter, sales to Medtronic were at record levels. The gains
stemmed from MiniLink REAL-Time Transmitter and related accessories
sales, which are incorporated in Medtronic’s MiniMed 530G insulin
pump and continuous glucose monitoring system. IntriCon anticipates
continued Medtronic revenue strength going forward.
Third-quarter 2015 professional audio communication sales
declined 42 percent from the prior-year period. The anticipated
decrease was due to the conclusion of the company's Singapore
Government contract in 2014. IntriCon will continue to leverage its
core technologies in professional audio communication to support
existing customers, as well as seek related hearing health and
medical product opportunities.
Looking AheadConcluded Gorder, “We have made significant
progress in building our value hearing health infrastructure,
securing new channel partners and advancing our technology
portfolio. With clear evidence of an emerging value hearing health
market opportunity and new partnerships coming on board, coupled
with our strong Medtronic business, we are poised for future
growth. We expect our momentum to build through year-end, and we
are on track to achieve sequential revenue growth in the fourth
quarter and higher sales year-over-year for 2015.”
Conference Call TodayAs previously announced, the company
will hold an investment community conference call today, Monday,
November 9, 2015, beginning at 4 p.m. CT. Mark Gorder, president
and chief executive officer, and Scott Longval, chief financial
officer, will review third-quarter performance and discuss the
company’s strategies. To join the conference call, dial:
1-888-364-3109 and provide the conference ID number 8184709 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, November 23,
2015. To access the replay, dial 1-888-203-1112 and enter passcode:
8184709.
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, 2014. 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 Nine Months Ended
September 30, September 30, September 30, September 30, 2015
2014 2015 2014
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
- Sales, net $ 17,341 $ 17,005 $ 51,063 $ 51,822 Cost of sales
12,706 12,529 37,515
37,801 Gross profit 4,635 4,476 13,548 14,021
Operating expenses: Sales and marketing 854 917 2,739 2,815 General
and administrative 1,708 1,647 5,150 4,887 Research and development
1,344 1,214 3,864 3,530 Restructuring charges -
- - 83 Total operating
expenses 3,906 3,778 11,753
11,315 Operating income 729 698 1,795 2,706
Interest expense (95 ) (99 ) (287 ) (362 ) Other income
(expense) (131 ) 27 17
(35 ) Income from continuing operations before income taxes and
discontinued operations 503 626 1,525 2,309 Income tax
(benefit) expense (125 ) 68 107
151 Income before discontinued operations 628 558
1,418 2,158 Loss on sale of discontinued operations - - - (120 )
Loss from discontinued operations, net of income taxes -
- - (150 ) Net
income $ 628 $ 558 $ 1,418 $ 1,888
Basic income (loss) per share: Continuing operations $ 0.11
$ 0.10 $ 0.24 $ 0.37 Discontinued operations -
- - (0.05 ) Net income per share: $
0.11 $ 0.10 $ 0.24 $ 0.33
Diluted income (loss) per share: Continuing operations $ 0.10 $
0.09 $ 0.23 $ 0.36 Discontinued operations - -
- (0.04 ) Net income per share: $ 0.10
$ 0.09 $ 0.23 $ 0.31 Average
shares outstanding: Basic 5,943 5,820 5,873 5,777 Diluted 6,210
6,148 6,214 6,037
INTRICON CORPORATION
Consolidated Condensed Balance Sheets (In Thousands,
Except Per Share Amounts) September 30, December
31,
2015
2014
(Unaudited) Current assets: Cash $ 397 $ 328 Restricted cash
592 640 Accounts receivable, less allowance for doubtful
accounts of $113 at September 30, 2015 and $120 at December 31,
2014 7,492 7,673 Inventories 13,137 9,983 Other current assets
1,028 1,013 Total current assets 22,646 19,637
Machinery and equipment 37,963 35,104 Less: Accumulated
depreciation 31,936 30,859 Net
machinery and equipment 6,027 4,245 Goodwill 9,194 9,194
Investment in partnerships 278 387 Other assets, net 408
498 Total assets $ 38,553 $ 33,961
Current liabilities: Checks written in excess of cash
$ 1,057 $ 516 Current maturities of long-term debt 1,929 1,886
Accounts payable 6,634 5,438 Accrued salaries, wages and
commissions 2,908 2,519 Deferred gain 83 110 Other accrued
liabilities 1,391 1,364
Total current liabilities
14,002 11,833 Long-term debt, less current maturities 5,121
4,627 Other postretirement benefit obligations 481 485 Accrued
pension liabilities 686 741 Deferred gain - 55 Other long-term
liabilities 94 113 Total liabilities
20,384 17,854 Commitments and contingencies Shareholders’ equity:
Common stock, $1.00 par value per share; 20,000 shares authorized;
5,977 and 5,844 shares issued and outstanding at September 30, 2015
and December 31, 2014, respectively 5,977 5,844 Additional paid-in
capital 17,565 16,939 Accumulated deficit (4,856 ) (6,274 )
Accumulated other comprehensive loss (517 ) (402 )
Total shareholders' equity 18,169 16,107
Total liabilities and shareholders’ equity $ 38,553 $
33,961
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151109006532/en/
At IntriCon:Scott Longval, CFO,
651-604-9526slongval@intricon.comorAt PadillaCRT:Matt Sullivan,
612-455-1709matt.sullivan@padillacrt.com
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