[August 03, 2017] |
|
Surmodics Reports Third Quarter Fiscal 2017 Results and Updates Fiscal 2017 Guidance
Surmodics, Inc. (Nasdaq: SRDX), a leading provider of medical device and
in vitro diagnostic technologies to the healthcare industry, today
announced results for its fiscal 2017 third quarter, ended June 30, 2017.
Third Quarter Fiscal 2017 Highlights
-
FDA approves 446 patient SurVeil® DCB Pivotal Study
-
Total Revenue of $17.8 Million
-
EPS of $0.05, Non-GAAP EPS of $0.09
-
Increases financial outlook for fiscal 2017
"We are pleased with our third quarter revenue and earnings performance
which reflects continued execution toward our strategic objectives aimed
at driving our R&D initiatives forward while simultaneously delivering
strong operational results," said Gary Maharaj, President and CEO of
Surmodics. "We are also thrilled that we have recently received FDA
approval to begin our SurVeil DCB pivotal study, TRANSCEND. This
marks a significant milestone in the development of our drug-coated
balloon program, and we expect to begin enrollment by the end of
calendar 2017."
Third Quarter Fiscal 2017 Financial Results
Total revenue for the third quarter of fiscal 2017 was $17.8 million, as
compared with $20.0 million in the prior-year period, which included
hydrophilic royalty catch-up payments that netted to a $2.6 million
benefit. Excluding these items, revenue increased 2.5% in the
current-year quarter as compared with the year-ago period.
Medical Device revenue was $12.8 million in the third quarter of fiscal
2017, as compared with $15.7 million the year-ago period. The decrease
in revenue reflects the aforementioned net catch-up royalty payments in
the prior-year quarter. In Vitro Diagnostics revenue was $5.0 million
for the third quarter of fiscal 2017, an increase of 16.1% from the
year-ago period.
Diluted GAAP earnings per share in the third quarter of fiscal 2017 were
$0.05 as compared with $0.30 in the year-ago period. On a non-GAAP
basis, earnings per share were $0.09 in the third quarter of fiscal 2017
versus $0.41 last year. The change in earnings per share in the current
quarter period reflects planned increased investments in research,
development and other operating expenses to support the Company's
whole-product strategy, including the SurVeil DCB and other
proprietary products, and lower hydrophilic royalty revenue, partially
offset by a net gain from adjusting contingent consideration obligations
to fair value.
As of June 30, 2017, cash and investments were $43.7 million. Surmodics
generated cash from operating activities of $7.7 million in the first
nine months of fiscal 2017. Surmodics repurchased 169,868 common shares
for $4.0 million during the current quarter under the Company's share
repurchase program. Capital expenditures totaled $4.9 million for the
first nine months of fiscal 2017.
Fiscal 2017 Outlook
As a result of revenue performance in the first nine-months of fiscal
2017, Surmodics increased its fiscal 2017 revenue and earning guidance.
Surmodics expects fiscal year 2017 revenue to range from $70.0 million
to $72.0 million, up from previous expectations in the range of $65.0
million to $68.0 million. The Company expects diluted earnings (loss) in
the range of $0.15 to $0.25 per share as compared with the prior
guidance of $(0.02) to $0.08 per share. Non-GAAP diluted earnings per
share guidance range is now $0.29 to $0.39 as compared with prior
guidance of $0.15 to $0.25 per share.
Conference Call
Surmodics will host a webcast at 7:30 a.m. CT (8:30 a.m. ET) today to
discuss third quarter results. To access the webcast, go to the investor
relations portion of the Company's website at www.surmodics.com
and click on the webcast icon. A replay of the third quarter conference
call will be available by dialing 888-203-1112 and entering conference
call ID passcode 3371788. The audio replay will be available beginning
at 10:30 a.m. CT on Thursday, August 3, 2017, until 10:30 a.m. CT on
Thursday, August 10, 2017.
About Surmodics, Inc.
Surmodics is the global leader in surface modification technologies for
intravascular medical devices and a leading provider of chemical
components for in vitro diagnostic (IVD) tests and microarrays.
Following two recent acquisitions of Creagh Medical and NorMedix, the
Company is executing a key growth strategy for its medical device
business by expanding to offer total intravascular product solutions to
its medical device customers. The combination of proprietary surface
technologies, along with enhanced device design, development and
manufacturing capabilities, enables Surmodics to significantly increase
the value it offers with highly differentiated intravascular solutions
designed and engineered to meet the most demanding requirements. With
this focus on offering total solutions, Surmodics' mission remains to
improve the detection and treatment of disease. Surmodics is
headquartered in Eden Prairie, Minnesota. For more information about the
company, visit www.surmodics.com.
The content of Surmodics' website is not part of this press release or
part of any filings that the company makes with the SEC.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements. Statements that
are not historical or current facts, including statements about beliefs
and expectations regarding the Company's performance in the near- and
long-term, including our revenue, earnings and cash flow expectations
for fiscal 2017, and our SurVeil DCB and other proprietary
products, including the timing, impact and success of the TRANSCEND
clinical trial, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties, and important
factors could cause actual results to differ materially from those
anticipated, including (1) our ability to successfully develop, obtain
regulatory approval for, and commercialize our SurVeil DCB, and
other proprietary products; (2) our reliance on third parties (including
our customers and licensees) and their failure to successfully develop,
obtain regulatory approval for, market and sell products incorporating
our technologies; (3) our ability to successfully identify, acquire, and
integrate target companies, and achieve expected benefits from
acquisitions that are consummated; (4) possible adverse market
conditions and possible adverse impacts on our cash flows, and (5) the
factors identified under "Risk Factors" in Part I, Item 1A of our Annual
Report on Form 10-K for the fiscal year ended September 30, 2016, and
updated in our subsequent reports filed with the SEC. These reports are
available in the Investors section of our website at www.surmodics.com
and at the SEC website at www.sec.gov.
Forward-looking statements speak only as of the date they are made, and
we undertake no obligation to update them in light of new information or
future events.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with U.S.
generally accepted accounting principles, or GAAP, Surmodics is
reporting non-GAAP financial results including non-GAAP operating
income, non-GAAP income before income taxes, non-GAAP net income, EBITDA
and non-GAAP diluted net income per share, and the non-GAAP effective
tax rate. We believe that these non-GAAP measures, when read in
conjunction with the Company's GAAP financial statements, provide
meaningful insight into our operating performance excluding certain
event-specific matters, and provide an alternative perspective of our
results of operations. We use non-GAAP measures, including those set
forth in this release, to assess our operating performance and to
determine payout under our executive compensation programs. We believe
that presentation of certain non-GAAP measures allows investors to
review our results of operations from the same perspective as management
and our board of directors and facilitates comparisons of our current
results of operations. The method we use to produce non-GAAP results is
not in accordance with GAAP and may differ from the methods used by
other companies. Non-GAAP results should not be regarded as a substitute
for corresponding GAAP measures but instead should be utilized as a
supplemental measure of operating performance in evaluating our
business. Non-GAAP measures do have limitations in that they do not
reflect certain items that may have a material impact on our reported
financial results. As such, these non-GAAP measures should be viewed in
conjunction with both our financial statements prepared in accordance
with GAAP and the reconciliation of the supplemental non-GAAP financial
measures to the comparable GAAP results provided for the specific
periods presented, which are attached to this release.
|
Surmodics, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Income
|
(in thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales
|
|
|
|
$
|
8,327
|
|
|
|
$
|
7,512
|
|
|
|
$
|
23,964
|
|
|
|
$
|
22,866
|
|
Royalties and license fees
|
|
|
|
|
7,244
|
|
|
|
|
10,556
|
|
|
|
|
22,564
|
|
|
|
|
25,207
|
|
Research, development and other
|
|
|
|
|
2,219
|
|
|
|
|
1,904
|
|
|
|
|
6,526
|
|
|
|
|
5,139
|
|
Total revenue
|
|
|
|
|
17,790
|
|
|
|
|
19,972
|
|
|
|
|
53,054
|
|
|
|
|
53,212
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
|
|
2,914
|
|
|
|
|
2,777
|
|
|
|
|
8,104
|
|
|
|
|
8,069
|
|
Research and development
|
|
|
|
|
7,927
|
|
|
|
|
4,693
|
|
|
|
|
22,105
|
|
|
|
|
13,195
|
|
Selling, general and administrative
|
|
|
|
|
5,232
|
|
|
|
|
4,483
|
|
|
|
|
15,170
|
|
|
|
|
12,984
|
|
Acquired intangible asset amortization
|
|
|
|
|
603
|
|
|
|
|
806
|
|
|
|
|
1,790
|
|
|
|
|
1,940
|
|
Contingent consideration accretion expense (gain)
|
|
|
|
|
(629
|
)
|
|
|
|
555
|
|
|
|
|
(803
|
)
|
|
|
|
1,056
|
|
Acquisition transaction, integration and other costs
|
|
|
|
|
-
|
|
|
|
|
61
|
|
|
|
|
-
|
|
|
|
|
3,192
|
|
Total operating costs and expenses
|
|
|
|
|
16,047
|
|
|
|
|
13,375
|
|
|
|
|
46,366
|
|
|
|
|
40,436
|
|
Operating income
|
|
|
|
|
1,743
|
|
|
|
|
6,597
|
|
|
|
|
6,688
|
|
|
|
|
12,776
|
|
Other income (loss), net
|
|
|
|
|
(490
|
)
|
|
|
|
263
|
|
|
|
|
153
|
|
|
|
|
72
|
|
Income from operations before income taxes
|
|
|
|
|
1,253
|
|
|
|
|
6,860
|
|
|
|
|
6,841
|
|
|
|
|
12,848
|
|
Income tax provision
|
|
|
|
|
(533
|
)
|
|
|
|
(2,926
|
)
|
|
|
|
(3,315
|
)
|
|
|
|
(5,440
|
)
|
Net income
|
|
|
|
$
|
720
|
|
|
|
$
|
3,934
|
|
|
|
$
|
3,526
|
|
|
|
$
|
7,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per share:
|
|
|
|
$
|
0.05
|
|
|
|
$
|
0.30
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per share:
|
|
|
|
$
|
0.05
|
|
|
|
$
|
0.30
|
|
|
|
$
|
0.26
|
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
13,155
|
|
|
|
|
12,995
|
|
|
|
|
13,190
|
|
|
|
|
12,969
|
|
Diluted
|
|
|
|
|
13,385
|
|
|
|
|
13,284
|
|
|
|
|
13,410
|
|
|
|
|
13,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surmodics, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(in thousands)
|
(Unaudited)
|
|
|
|
|
|
June 30,
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
Assets
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
11,350
|
|
|
$
|
24,987
|
Available-for-sale securities
|
|
|
|
|
32,360
|
|
|
|
21,954
|
Accounts receivable, net
|
|
|
|
|
6,994
|
|
|
|
6,869
|
Inventories, net
|
|
|
|
|
3,505
|
|
|
|
3,579
|
Prepaids and other
|
|
|
|
|
3,460
|
|
|
|
1,169
|
Total Current Assets
|
|
|
|
|
57,669
|
|
|
|
58,558
|
Property and equipment, net
|
|
|
|
|
22,250
|
|
|
|
19,601
|
Deferred tax assets
|
|
|
|
|
3,073
|
|
|
|
5,027
|
Intangible assets, net
|
|
|
|
|
21,230
|
|
|
|
22,525
|
Goodwill
|
|
|
|
|
26,791
|
|
|
|
26,555
|
Other assets
|
|
|
|
|
877
|
|
|
|
628
|
Total Assets
|
|
|
|
$
|
131,890
|
|
|
$
|
132,894
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
7,544
|
|
|
|
10,135
|
Contingent consideration, less current portion
|
|
|
|
|
12,916
|
|
|
|
13,592
|
Other long-term liabilities
|
|
|
|
|
2,081
|
|
|
|
2,334
|
Total Liabilities
|
|
|
|
|
22,541
|
|
|
|
26,061
|
Total Stockholders' Equity
|
|
|
|
|
109,349
|
|
|
|
106,833
|
Total Liabilities and Stockholders' Equity
|
|
|
|
$
|
131,890
|
|
|
$
|
132,894
|
|
|
|
|
|
|
|
|
|
|
|
Surmodics, Inc. and Subsidiaries
|
Supplemental Segment Information
|
(in thousands)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
Revenue:
|
|
|
|
|
|
|
% of Total
|
|
|
|
|
|
% of Total
|
|
|
% Change
|
Medical Device
|
|
|
|
$
|
12,778
|
|
|
|
|
71.8
|
%
|
|
|
$
|
15,654
|
|
|
|
|
78.4
|
%
|
|
|
-18.4
|
%
|
In Vitro Diagnostics
|
|
|
|
|
5,012
|
|
|
|
|
28.2
|
%
|
|
|
|
4,318
|
|
|
|
|
21.6
|
%
|
|
|
16.1
|
%
|
Total revenue
|
|
|
|
$
|
17,790
|
|
|
|
|
|
|
$
|
19,972
|
|
|
|
|
|
|
-10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
Revenue:
|
|
|
|
|
|
|
% of Total
|
|
|
|
|
|
% of Total
|
|
|
% Change
|
Medical Device
|
|
|
|
$
|
39,260
|
|
|
|
|
74.0
|
%
|
|
|
$
|
39,500
|
|
|
|
|
74.2
|
%
|
|
|
-0.6
|
%
|
In Vitro Diagnostics
|
|
|
|
|
13,794
|
|
|
|
|
26.0
|
%
|
|
|
|
13,712
|
|
|
|
|
25.8
|
%
|
|
|
0.6
|
%
|
Total revenue
|
|
|
|
$
|
53,054
|
|
|
|
|
|
|
$
|
53,212
|
|
|
|
|
|
|
-0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Device
|
|
|
|
$
|
1,403
|
|
|
|
$
|
6,673
|
|
|
|
$
|
6,627
|
|
|
|
$
|
12,825
|
|
|
|
|
In Vitro Diagnostics
|
|
|
|
|
2,230
|
|
|
|
|
1,673
|
|
|
|
|
5,922
|
|
|
|
|
5,298
|
|
|
|
|
Total segment operating income
|
|
|
|
|
3,633
|
|
|
|
|
8,346
|
|
|
|
|
12,549
|
|
|
|
|
18,123
|
|
|
|
|
Corporate
|
|
|
|
|
(1,890
|
)
|
|
|
|
(1,749
|
)
|
|
|
|
(5,861
|
)
|
|
|
|
(5,347
|
)
|
|
|
|
Total income from operations
|
|
|
|
$
|
1,743
|
|
|
|
$
|
6,597
|
|
|
|
$
|
6,688
|
|
|
|
$
|
12,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surmodics, Inc. and Subsidiaries
|
Reconciliation of GAAP Measures to Non-GAAP Amounts
|
Schedule of Adjusted EBITDA and Cash Flows from Operations
|
(in thousands)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
Net Income
|
|
|
|
$
|
720
|
|
|
|
$
|
3,934
|
|
|
|
$
|
3,526
|
|
|
|
$
|
7,408
|
|
Income tax provision
|
|
|
|
|
533
|
|
|
|
|
2,926
|
|
|
|
|
3,315
|
|
|
|
|
5,440
|
|
Depreciation and amortization
|
|
|
|
|
1,405
|
|
|
|
|
1,388
|
|
|
|
|
4,006
|
|
|
|
|
2,297
|
|
EBITDA
|
|
|
|
|
2,658
|
|
|
|
|
8,248
|
|
|
|
|
10,847
|
|
|
|
|
15,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration (gain) loss (1)
|
|
|
|
|
(629
|
)
|
|
|
|
555
|
|
|
|
|
(803
|
)
|
|
|
|
1,056
|
|
Foreign exchange loss (2)
|
|
|
|
|
594
|
|
|
|
|
135
|
|
|
|
|
121
|
|
|
|
|
569
|
|
Acquisition transaction, integration and other costs (4)
|
|
|
|
|
-
|
|
|
|
|
61
|
|
|
|
|
-
|
|
|
|
|
3,192
|
|
Gain on strategic investment (5)
|
|
|
|
|
-
|
|
|
|
|
(361
|
)
|
|
|
|
-
|
|
|
|
|
(361
|
)
|
Adjusted EBITDA
|
|
|
|
$
|
2,623
|
|
|
|
$
|
8,638
|
|
|
|
$
|
10,165
|
|
|
|
$
|
19,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
|
|
$
|
3,393
|
|
|
|
$
|
3,302
|
|
|
|
$
|
7,656
|
|
|
|
$
|
18,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Non-GAAP Net Income per Common Share Reconciliation
|
For the Fiscal Year Ended September 30, 2017
|
(Unaudited)
|
|
|
|
|
|
Full Fiscal Year Estimate
|
|
|
|
|
Low
|
|
|
High
|
GAAP results
|
|
|
|
$
|
0.15
|
|
|
|
$
|
0.25
|
|
Contingent consideration adjustments (1)
|
|
|
|
|
(0.03
|
)
|
|
|
|
(0.03
|
)
|
Foreign exchange loss (2)
|
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
Amortization of acquired intangibles (3)
|
|
|
|
|
0.16
|
|
|
|
|
0.16
|
|
Non-GAAP results
|
|
|
|
$
|
0.29
|
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surmodics, Inc., and Subsidiaries
|
Net Income and Diluted EPS GAAP to Non-GAAP Reconciliation
|
(in thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
For the Three Months Ended June 30, 2016
|
|
|
|
|
Total Revenue
|
|
|
Operating Income
|
|
|
Operating Income Percentage
|
|
|
Income Before Income Taxes
|
|
|
Net Income (7)
|
|
|
Diluted EPS
|
|
|
Effective tax rate
|
GAAP
|
|
|
|
$
|
17,790
|
|
|
$
|
1,743
|
|
|
|
9.8
|
%
|
|
|
$
|
1,253
|
|
|
|
$
|
720
|
|
|
|
$
|
0.05
|
|
|
|
42.5
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration gain (1)
|
|
|
|
?
|
|
|
|
(629
|
)
|
|
|
(3.5
|
)
|
|
|
|
(629
|
)
|
|
|
|
(629
|
)
|
|
|
|
(0.05
|
)
|
|
|
42.9
|
|
Foreign exchange loss (2)
|
|
|
|
?
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
594
|
|
|
|
|
594
|
|
|
|
|
0.05
|
|
|
|
(41.7
|
)
|
Amortization of acquired intangible assets (3)
|
|
|
|
?
|
|
|
|
603
|
|
|
|
3.4
|
|
|
|
|
603
|
|
|
|
|
524
|
|
|
|
|
0.04
|
|
|
|
(10.2
|
)
|
Non-GAAP
|
|
|
|
$
|
17,790
|
|
|
$
|
1,717
|
|
|
|
9.7
|
%
|
|
|
$
|
1,821
|
|
|
|
$
|
1,209
|
|
|
|
$
|
0.09
|
|
|
|
33.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2016
|
|
|
|
|
Total Revenue
|
|
|
Operating Income
|
|
|
Operating Income Percentage
|
|
|
Income Before Income Taxes
|
|
|
Net Income (7)
|
|
|
Diluted EPS
|
|
|
Effective tax rate
|
GAAP
|
|
|
|
$
|
19,972
|
|
|
$
|
6,597
|
|
|
|
33.0
|
%
|
|
|
$
|
6,860
|
|
|
|
$
|
3,934
|
|
|
|
$
|
0.30
|
|
|
|
42.7
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration accretion expense (1)
|
|
|
|
?
|
|
|
|
555
|
|
|
|
2.8
|
|
|
|
|
555
|
|
|
|
|
555
|
|
|
|
|
0.03
|
|
|
|
(3.2
|
)
|
Foreign exchange gain (2)
|
|
|
|
?
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(234
|
)
|
|
|
|
(234
|
)
|
|
|
|
0.03
|
|
|
|
1.3
|
|
Amortization of acquired intangible assets (3)
|
|
|
|
?
|
|
|
|
806
|
|
|
|
4.0
|
|
|
|
|
806
|
|
|
|
|
667
|
|
|
|
|
0.05
|
|
|
|
(2.4
|
)
|
Non-GAAP
|
|
|
|
$
|
19,972
|
|
|
$
|
7,958
|
|
|
|
39.8
|
%
|
|
|
$
|
7,987
|
|
|
|
$
|
4,922
|
|
|
|
$
|
0.41
|
|
|
|
38.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surmodics, Inc., and Subsidiaries
|
Net Income and Diluted EPS GAAP to Non-GAAP Reconciliation -
continued
|
(in thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
For the Nine Months Ended June 30, 2017
|
|
|
|
|
Total Revenue
|
|
|
Operating Income
|
|
|
Operating Income Percentage
|
|
|
Income Before Income Taxes
|
|
|
Net Income (7)
|
|
|
Diluted EPS
|
|
|
Effective tax rate
|
GAAP
|
|
|
|
$
|
53,054
|
|
|
$
|
6,688
|
|
|
|
12.6
|
%
|
|
|
$
|
6,841
|
|
|
|
$
|
3,526
|
|
|
|
$
|
0.26
|
|
|
|
48.5
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration gain (1)
|
|
|
|
?
|
|
|
|
(803
|
)
|
|
|
(1.5
|
)
|
|
|
|
(803
|
)
|
|
|
|
(803
|
)
|
|
|
|
(0.06
|
)
|
|
|
6.4
|
|
Foreign exchange loss (2)
|
|
|
|
?
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
121
|
|
|
|
|
121
|
|
|
|
|
0.01
|
|
|
|
(1.1
|
)
|
Amortization of acquired intangible assets (3)
|
|
|
|
?
|
|
|
|
1,790
|
|
|
|
3.4
|
|
|
|
|
1,790
|
|
|
|
|
1,554
|
|
|
|
|
0.12
|
|
|
|
(9.1
|
)
|
Non-GAAP
|
|
|
|
$
|
53,054
|
|
|
$
|
7,675
|
|
|
|
14.5
|
%
|
|
|
$
|
7,949
|
|
|
|
$
|
4,398
|
|
|
|
$
|
0.33
|
|
|
|
44.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended June 30, 2016
|
|
|
|
|
Total Revenue
|
|
|
Operating Income
|
|
|
Operating Income Percentage
|
|
|
Income Before Income Taxes
|
|
|
Net Income (7)
|
|
|
Diluted EPS
|
|
|
Effective tax rate
|
GAAP
|
|
|
|
$
|
53,212
|
|
|
$
|
12,776
|
|
|
|
24.0
|
%
|
|
|
$
|
12,848
|
|
|
|
$
|
7,408
|
|
|
|
$
|
0.56
|
|
|
|
42.3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration accretion expense (1)
|
|
|
|
?
|
|
|
|
1,056
|
|
|
|
2.0
|
|
|
|
|
1,056
|
|
|
|
|
1,056
|
|
|
|
|
0.04
|
|
|
|
(3.2
|
)
|
Foreign exchange loss (2)
|
|
|
|
?
|
|
|
?
|
|
|
-
|
|
|
|
|
569
|
|
|
|
|
569
|
|
|
|
|
0.04
|
|
|
|
(1.5
|
)
|
Amortization of acquired intangible assets (3)
|
|
|
|
?
|
|
|
|
1,940
|
|
|
|
3.6
|
|
|
|
|
1,940
|
|
|
|
|
967
|
|
|
|
|
0.07
|
|
|
|
1.5
|
|
Acquisition transaction, integration and other costs (4)
|
|
|
|
?
|
|
|
|
3,192
|
|
|
|
6.0
|
|
|
|
|
3,192
|
|
|
|
|
2,825
|
|
|
|
|
0.22
|
|
|
|
(4.5
|
)
|
Gain on strategic investment (5)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(361
|
)
|
|
|
|
(361
|
)
|
|
|
|
(0.03
|
)
|
|
|
0.6
|
|
Research and development tax credit (6)
|
|
|
|
?
|
|
|
?
|
|
|
-
|
|
|
|
?
|
|
|
|
(222
|
)
|
|
|
|
(0.02
|
)
|
|
|
1.2
|
|
Non-GAAP
|
|
|
|
$
|
53,212
|
|
|
$
|
18,964
|
|
|
|
35.6
|
%
|
|
|
$
|
19,244
|
|
|
|
$
|
12,242
|
|
|
|
$
|
0.88
|
|
|
|
36.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
Represents accounting adjustments to state acquisition-related
contingent consideration liabilities at their estimated fair value,
including accretion for the passage of time as well as adjustments
to the liabilities' fair values related to changes in the timing
and/or probability of achieving milestones which trigger payment.
The tables include contingent consideration liability adjustments in
each respective historical period and do not include in
future-period fair value changes, other than estimated accretion
expense determined at the end of the current quarter.
|
(2)
|
|
|
|
Foreign exchange gain and loss are related to marking non-U.S.
dollar contingent consideration to period-end exchange rates. The
tables include foreign currency exchange loss or gain recorded in
each respective historical period and do not include forecasted
currency fluctuations in future periods.
|
(3)
|
|
|
|
Amortization of acquisition-related intangible assets and associated
tax impact.
|
(4)
|
|
|
|
Represents acquisition-related costs, including due diligence and
integration expenses. Due diligence and other fees include legal,
tax, investment banker and other expenses associated with
acquisitions that can be highly variable and not representative of
on-going operations. Most of these costs were not deductible for
income tax purposes.
|
(5)
|
|
|
|
Represents the gain recognized on the sale of a strategic investment.
|
(6)
|
|
|
|
Represents a discrete income tax benefit associated with the
December 2015 signing of the Protecting Americans from Tax Hikes Act
of 2015, which retroactively reinstated federal R&D income tax
credits for calendar 2015.
|
(7)
|
|
|
|
Net income includes the effect of the above adjustments on the
income tax provision, taking into account deferred taxes and
non-deductible items. An effective rate between 34-35% was used to
estimate the income tax impact of the adjustments, except that
expenses occurring in Ireland have not been tax-affected as all tax
benefits are offset by a full valuation allowance.
|
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