Company Delivers Continued Profitability,
Secures Value Hearing Health Channel Partner
IntriCon Corporation (NASDAQ:IIN), a designer, developer,
manufacturer and distributor of miniature and micro-miniature
body-worn devices, today announced financial results for its second
quarter ended June 30, 2015.
Highlights:
- Net sales of $17.1 million were in line
with expectations and increased 3 percent sequentially;
- The company continued to deliver
profitability with net income of $506,000, or $0.08 per diluted
share;
- IntriCon’s Medtronic business posted
record quarterly revenue; and,
- The company entered into a two-year
supply agreement with AudioNova International B.V. (AudioNova), one
of Europe’s leading hearing aid providers, operating more than
1,300 retail stores in 11 countries.
Financial ResultsFor the 2015 second quarter, the company
reported net sales of $17.1 million, compared to $17.5 million in
the prior-year period. IntriCon posted net income of $506,000, or
$0.08 per diluted share, versus net income of $813,000, or $0.13
per diluted share, for the 2014 second quarter.
“We are pleased with our second-quarter performance as we
continue to deliver profitability while building infrastructure
required to secure high-potential growth opportunities,” said Mark
S. Gorder, president and chief executive officer of IntriCon.
"While our Medical business fueled the sequential revenue growth,
we made significant strides in our strategy to drive business in
value hearing health by solidifying yet another prominent partner,
AudioNova, to deliver high-quality, low-cost hearing devices to the
European market.”
Gross profit margins were 26.8 percent compared to 27.3 percent
in the prior-year second quarter. The decrease was primarily due to
lower overall sales volumes.
Six-Month ResultsFor the 2015 six-month period, IntriCon
reported net sales of $33.7 million and net income of $790,000, or
$0.13 per diluted share. This compares to 2014 six-month net sales
of $34.8 million and net income of $1.3 million, or $0.22 per
diluted share. Included in 2014 six-month results was a net loss
from discontinued operations of $270,000, or $0.05 per diluted
share.
Gross profit margins decreased to 26.4 percent from 27.4 percent
for the prior-year, six-month period. Again, this was primarily due
to the second-quarter factors detailed above.
Business UpdateHearing health sales declined 12 percent
during the second quarter from the prior-year quarter, primarily
due to one-time decreases in the conventional hearing health
channel. This was partially offset by gains in targeted value
hearing health initiatives. While hearing health sales are down
from the prior year, IntriCon remains focused on building the
infrastructure required to secure other notable partners in the
second half of 2015 and beyond, that can benefit from the
outcomes-based hearing health model we offer. The company
anticipates year-over-year hearing health sales gains driven by new
value hearing health programs that are anticipated to ramp in the
second half of 2015.
Said Gorder, “We continue to make strides in the value hearing
health market. Through our new supply agreement, AudioNova will
offer technically advanced hearing devices, manufactured by
IntriCon. AudioNova's smartsound brand is based on IntriCon's
Audion™ amplifier, and offers technically advanced features at
value hearing health price points. AudioNova has begun rollout of
the smartsound brand in the Netherlands and intends to expand the
program to other targeted European countries in the future.
IntriCon expects to begin shipping product in the third
quarter.
“In addition, we continue to work with the United Kingdom’s
National Health Service (NHS) on product approval, and just this
week we received correspondence that the NHS Audiology Supplies
Group (ASG) has completed their evaluation of our products and
software. While we have yet to receive formal feedback, we are
pleased with how our products and software preformed during the
evaluation, and are encouraged by the informal feedback. We
anticipate formal feedback in the third quarter. 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. We
believe we are well positioned to serve their needs, and we’re
developing new technologies to further enhance delivery
efficiencies and product standards in the future.”
Sales in IntriCon’s medical business increased 8 percent in the
2015 second quarter, primarily driven by IntriCon’s largest
customer, Medtronic. Sales to Medtronic for the second quarter were
at record levels. The gains were driven by the 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 Medtronic revenue gains
throughout 2015.
Second-quarter 2015 professional audio communication sales
declined 16 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, “I am encouraged with the
progress we made in the first half of the year. We have focused a
significant amount of resources advancing our technology portfolio,
building our value hearing health infrastructure and securing key
channel partners. 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 well positioned
for future growth. We expect our momentum to build throughout the
year and are on track to achieve sequential revenue growth in the
third quarter and higher sales year-over-year for 2015.”
Conference Call TodayAs previously announced, the company
will hold an investment community conference call today, Thursday,
August 6, 2015, beginning at 4 p.m. CT. Mark Gorder, president and
chief executive officer, and Scott Longval, chief financial
officer, will review second-quarter performance and discuss the
company’s strategies. To join the conference call, dial:
1-888-632-3384 and provide the conference ID number 7820196 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 Thursday, August 20,
2015. To access the replay, dial 1-888-203-1112 and enter passcode:
7820196.
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 Six Months Ended June 30, June 30, June
30, June 30, 2015 2014 2015 2014
(Unaudited)
(Unaudited) (Unaudited)
(Unaudited) Sales, net $ 17,120 $ 17,507 $
33,722 $ 34,817 Cost of sales 12,535 12,735
24,809 25,272 Gross profit 4,585
4,772 8,913 9,545 Operating expenses: Sales and marketing
898 891 1,885 1,898 General and administrative 1,733 1,616 3,442
3,240 Research and development 1,294 1,148 2,520 2,316
Restructuring charges - - -
83 Total operating expenses 3,925
3,655 7,847 7,537
Operating income 660 1,117 1,066 2,008 Interest expense (89
) (125 ) (192 ) (263 ) Other income (expense) 12
(122 ) 148 (62 ) Income from continuing
operations before income taxes and discontinued operations 583 870
1,022 1,683 Income tax expense 77 57
232 83 Income before
discontinued operations 506 813 790 1,600 Loss on sale of
discontinued operations - - - (120 ) Loss from discontinued
operations, net of income taxes - -
- (150 ) Net income $ 506 $ 813
$ 790 $ 1,330 Basic income (loss) per
share: Continuing operations $ 0.09 $ 0.14 $ 0.14 $ 0.28
Discontinued operations - - -
(0.05 ) Net income per share: $ 0.09 $ 0.14
$ 0.14 $ 0.23 Diluted income (loss) per
share: Continuing operations $ 0.08 $ 0.13 $ 0.13 $ 0.27
Discontinued operations - -
(0.05 ) Net income per share: $ 0.08 $ 0.13 $
0.13 $ 0.22 Average shares outstanding: Basic
5,856 5,780 5,848 5,754 Diluted 6,242 6,081 6,229 5,973
INTRICON CORPORATION Consolidated Condensed
Balance Sheets (In Thousands, Except Per Share Amounts)
June
30,
December 31,
2015
2014
(Unaudited) Current assets: Cash $ 273 $ 328 Restricted cash
612 640 Accounts receivable, less allowance for doubtful accounts
of $115 at June 30, 2015 and $120 at December 31, 2014 7,785 7,673
Inventories 11,298 9,983 Other current assets 859
1,013 Total current assets 20,827 19,637
Machinery and equipment 36,768 35,104 Less: Accumulated
depreciation 31,559 30,859 Net
machinery and equipment 5,209 4,245 Goodwill 9,194 9,194
Investment in partnerships 332 387 Other assets, net 430
498 Total assets $ 35,992 $ 33,961
Current liabilities: Checks written in excess of cash
$ 12 $ 516 Current maturities of long-term debt 1,894 1,886
Accounts payable 6,694 5,438 Accrued salaries, wages and
commissions 2,294 2,519 Deferred gain 110 110 Other accrued
liabilities 1,475 1,364 Total current
liabilities 12,479 11,833 Long-term debt, less current
maturities 5,076 4,627 Other postretirement benefit obligations 482
485 Accrued pension liabilities 685 741 Deferred gain - 55 Other
long-term liabilities 94 113 Total
liabilities 18,816 17,854 Commitments and contingencies
Shareholders’ equity: Common stock, $1.00 par value per share;
20,000 shares authorized; 5,864 and 5,844 shares issued and
outstanding at June 30, 2015 and December 31, 2014, respectively
5,864 5,844 Additional paid-in capital 17,303 16,939 Accumulated
deficit (5,484 ) (6,274 ) Accumulated other comprehensive loss
(507 ) (402 ) Total shareholders' equity
17,176 16,107 Total liabilities and
shareholders’ equity $ 35,992 $ 33,961
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150806006346/en/
At IntriCon:Scott Longval, CFO,
651-604-9526slongval@intricon.comorAt PadillaCRT:Matt
Sullivan, 612-455-1709matt.sullivan@padillacrt.com
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