Kensey Nash Reports Third Quarter Results, Announces Earnings of
$0.26 Per Share and Revenues of $14.8 Million
EXTON, Pa., April 20 /PRNewswire-FirstCall/ -- Kensey Nash Corporation
(NASDAQ:KNSY) today announced earnings of $0.26 per share and revenues of $14.8
million for its third fiscal quarter ended March 31, 2005. This compares to
the Company's revised guidance range for revenues of $14.3 to $14.8 million and
earnings per share of $0.25 to $0.26 provided on March 16, 2005.
Third Quarter Results. Total revenues for the third quarter were $14.8 million
compared to $15.8 million in the prior year period. Net sales of $9.4 million
were consistent with our prior year third quarter. Net income for the quarter
decreased 8% to $3.2 million, or $0.26 per share, compared to $3.5 million, or
$0.28 per share, for the prior year period. The declines in total revenue and
in net income are primarily the result of an $800,000 decrease in royalty
income in the March 31, 2005 quarter over the comparable prior year period.
This is the result of the 33% decrease in the Angio-Seal(TM) royalty rate, from
9% to 6% which occurred in April 2004, partially offset by continued
Angio-Seal(TM) unit growth and the addition of the Orthovita royalty income in
the current year.
Royalty income of $5.4 million increased 8% sequentially from the quarter ended
December 31, 2004 and included $4.9 million in Angio-Seal(TM) royalties and
$572,000 in royalties from Orthovita (NASDAQ:VITA). Although Angio- Seal(TM)
sales increased 17% in the March 31, 2005 quarter over the same period a year
earlier, Angio-Seal royalty income of $4.9 million declined from $6.2 million,
a 21% decrease from the prior year period as a result of the 33% decline in the
royalty rate. In the Company's fourth quarter, the comparative year over year
Angio-Seal(TM) royalty income rates will be approximately 6% in both the
current and prior year periods. Combined with on-going strength of
Angio-Seal(TM) end-user sales, continued launches by Orthovita of co-developed
products, and other sources of royalty income in progress, the Company expects
royalty income to increase going forward.
Kensey Nash's balance sheet continues to be strong with $107.5 million of total
assets, $46.5 million of cash and interest bearing investments, $99.0 million
of stockholders' equity, and no debt reported at March 31, 2005. During the
quarter, the Company generated cash flow from operations of $3.7 million offset
primarily by capital spending of $7.5 million, including $6.0 million for
construction costs of our new facility, and share repurchases totaling $1.7
million.
Year-to-Date Results. Total revenues for the nine months ended March 31, 2005
increased 8% to $45.1 million compared to $41.9 million in the prior year
period. Net sales increased 20% to $29.7 million from $24.8 million in the
comparable nine months of the prior fiscal year. Net income for the nine
months ended March 31, 2005 increased 10% to $9.6 million, or $0.79 per share,
compared to $8.8 million, or $0.72 per share, for the prior year period.
CEO Comments on Results. "St. Jude Medical's Angio-Seal(TM) sales continued to
grow, both sequentially and year over year," commented Joseph W. Kaufmann,
President and CEO of Kensey Nash Corporation. "Orthovita royalties increased
significantly over the prior year quarter, the period of the first product
launch, and 10% sequentially, reflecting the strong market acceptance of
products jointly developed by Kensey Nash and Orthovita in the bone grafting
market," he continued. "Overall, net sales for the quarter were flat year over
year, however sales of Angio-Seal(TM) components were up 19% but were offset by
a similar decline in sales of sports medicine products. As previously stated,
we look for growth in the sports medicine business to return in our fiscal
2006," Mr. Kaufmann commented.
CEO Comments on TriActiv. "This was a very exciting quarter for our company
with the FDA clearance of the TriActiv(R) Embolic Protection System and the
recent launch of this product by our new direct sales force in the U.S.," Mr. Kaufmann continued. "We also received CE mark approval for European marketing
and sale of the FX(TM) system, a new generation of the TriActiv(R) System.
These approvals provide a significant platform for growth in fiscal 2006," he
continued. "On the TriActiv clinical front, we initiated a clinical study, a
multi-center prospective registry, for the FX(TM) system in the U.S. during the
quarter." Fiscal Year 2005 Guidance. The Company's guidance for the fiscal year was
provided on March 16, 2005, and remains unchanged. The Company estimates
earnings per share of $1.08 to $1.10. Total fiscal year revenues are estimated
to be in a range of $61 to $62 million. Included in this estimate are net
sales of $40 to $41 million, an approximate increase of 10% to 13% over the
previous fiscal year, and royalties of approximately $21 to $21.5 million. The
estimates provided exclude any TriActiv(R) System sales in the U.S. for the
remainder of fiscal 2005 and also exclude any estimates of the impact of the
Company's transition to its new facility.
Share Repurchase. During the third fiscal quarter 2005, the Company
repurchased 64,133 shares for approximately $1.7 million. These shares were
part of the previously authorized and announced share repurchase programs,
under which approximately 395,000 shares remain authorized for repurchase under
the March 2005 plan. This repurchase program is effective through September
30, 2005.
Conference Call and Webcast. The Company will be holding a conference call to
discuss the third quarter earnings results on Thursday, April 21, 2005 at 11:00
AM eastern time. A live webcast of the conference call will be broadcast.
Please visit the investor relations page at http://www.kenseynash.com/ for the
link. To participate in the conference call, interested parties may call
612-332-0819. A replay of the call will also be available starting April 21,
2005 at 2:30 PM Eastern through Tuesday, April 26, 2005 at 11:59 PM Eastern by
calling 800-475-6701, access code 779479.
About Kensey Nash Corporation. Kensey Nash Corporation is a leading developer
and manufacturer of absorbable biomaterials-based products with applications in
the cardiology, orthopaedics, spine, drug and biologics delivery,
periodontal/dental, surgical and wound care markets. The Company was a pioneer
in the field of arterial puncture closure, as the inventor and developer of the
Angio-Seal(TM) Vascular Closure Device, which is licensed to St. Jude Medical,
Inc. The TriActiv(R) System, a novel embolic protection system, is approved
for sale in the U.S. The TriActiv(R) FX(TM) System, the second generation of
the TriActiv(R) System, is approved for sale in the European Union and is being
studied in a clinical trial in the U.S.
Cautionary Note for Forward-Looking Statements. This press release contains
forward-looking statements that reflect the Company's current expectations
about its prospects and opportunities including the Company's guidance
regarding operating results for fiscal 2005 under the caption "Fiscal Year 2005
Guidance." The Company has tried to identify these forward-looking statements
by using words such as "expect," "anticipate," "estimate," "plan," "will,"
"forecast," "believe," guidance," "projection" or similar expressions, but
these words are not the exclusive means for identifying such statements. The
Company cautions that a number of risks, uncertainties, and other important
factors could cause the Company's actual results to differ materially from
those in the forward-looking statements including, without limitation, the
ability of the Company and its customers to obtain necessary regulatory
approvals (including future regulatory approvals for the TriActiv(R) System)
and the timing thereof, the Company's dependence on two major customers: St. Jude Medical and Orthovita, St. Jude Medical's success in marketing the
Angio-Seal(TM) device, Orthovita's success in selling co- developed products,
demand for and the Company's ability to develop and manufacture biomaterial
products, including Angio-Seal(TM) components, sales and marketing success of
the TriActiv(R) System, and competition from other technologies in the
marketplace. For a more detailed discussion of these and other factors, please
see the Company's SEC filings, including the disclosure under "Risk Factors" in
those filings. Except as expressly required by the federal securities laws,
the Company undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, changed circumstances or
future events or for any other reason.
KENSEY NASH CORPORATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) Three Months Nine Months
Ended March 31, Ended March 31,
2005 2004 2005 2004
Revenues:
Net sales $9,365,150 $9,402,745 $29,664,812 $24,756,449
Research and
development - 135,099 253,292 462,208
Royalty income 5,425,668 6,237,616 15,170,825 16,660,906
Total revenues 14,790,818 15,775,460 45,088,929 41,879,563
Operating costs and
expenses:
Cost of products
sold 3,844,127 4,275,791 12,194,487 11,155,622
Research and
development 3,636,957 4,308,411 11,755,406 12,633,967
Selling, general and
administrative 3,101,907 2,222,779 8,365,363 6,255,144
Total operating
costs and
expenses 10,582,991 10,806,981 32,315,256 30,044,733
Income from operations 4,207,827 4,968,479 12,773,673 11,834,830
Interest and other
income, net 353,073 252,005 994,833 798,039
Pre-tax income 4,560,900 5,220,484 13,768,506 12,632,869
Income tax expense 1,368,270 1,735,092 4,130,552 3,870,865
Net income $3,192,630 $3,485,392 $9,637,954 $8,762,004
Income per common share,
assuming dilution $0.26 $0.28 $0.79 $0.72
Diluted weighted average
common shares
outstanding 12,199,697 12,265,534 12,218,812 12,245,510 CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) March 31, June 30,
2005 2004
Assets
Current assets:
Cash, cash equivalents and
investments $46,484,677 $61,096,487
Trade receivables 8,509,781 6,005,702
Other receivables 6,500,768 4,943,878
Inventory 4,928,961 3,481,599
Prepaids and other assets 2,562,658 1,418,528
Deferred tax asset, current 1,734,881 2,607,669
Total current assets 70,721,726 79,553,863
Property, plant and equipment, net 28,742,575 15,984,900
Acquired patents and proprietary
rights, net 4,716,687 2,410,623
Deferred tax asset, non-current - 2,825
Goodwill 3,284,303 3,284,303
Total assets $107,465,291 $101,236,514 Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued
expenses $7,292,139 $6,483,366
Current portion of debt - 219,147
Current portion of deferred revenue 100,240 109,773
Total current liabilities 7,392,379 6,812,286
Long term portion of deferred revenue 385,135 -
Deferred tax liability, non-current 676,674 -
Total stockholders' equity 99,011,103 94,424,228
Total liabilities and stockholders'
equity $107,465,291 $101,236,514
DATASOURCE: Kensey Nash Corporation CONTACT: Joseph W. Kaufmann, President and Chief Executive Officer, Kensey Nash Corporation, +1-610-524-0188 Web site: http://www.kenseynash.com/
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