Cardiovascular Systems, Inc. Reports Fiscal 2022 Fourth Quarter and Full Year Financial
ST. PAUL, Minn.–(BUSINESS WIRE)–Cardiovascular Systems, Inc. (CSI®) (NASDAQ: CSII), a medical device company developing and commercializing innovative interventional treatment systems for patients with vascular and coronary artery disease, today reported financial results for its fourth quarter and full year, ended June 30, 2022.
Executive Commentary – Scott Ward, Chairman, President and CEO
“During Q4, we achieved strong sequential growth across all business segments with our U.S. peripheral and coronary atherectomy franchises growing 9% and 16% over prior quarter, respectively. International revenues grew 14% sequentially to $5 million.
“In addition, key operating statistics, like new accounts, new customers trained and new contracts, continue to demonstrate strong demand for our products and position us for continued momentum in fiscal 23.
“We also achieved our key product development milestones in the quarter. Following the first in human experiences with our Propel™ percutaneous ventricular assist device in March, we recently submitted the investigational device exemption for the early feasibility study, which we expect to start in Q3. We also remain on track to achieve the milestones for our thrombectomy devices, intravascular lithotripsy and Everolimus drug-coated balloons.
“With strong execution in R&D and a compelling rebound in sales, we have renewed momentum in our business and we are excited about the prospects for a strong year in fiscal 23.”
Fourth Quarter Financial Highlights
CSI’s fiscal 2022 fourth quarter revenues were $62.5 million, representing a decrease of $8.5 million, or 12.0% compared to the fourth quarter last year. Gross profit margin was 74.0%.
Selling, general and administrative expenses were $46.6 million, an increase of $0.9 million, or 1.9%. Research and development expenses decreased 5.1% to $8.8 million due to the timing of development activities.
Fourth-quarter net loss of $9.7 million, or $0.25 per basic and diluted share, compared unfavorably to a loss of $5.3 million, or $0.14 per basic and diluted share in the prior year period. The Adjusted EBITDA loss increased to $4.3 million from near breakeven in the prior year.
Fiscal Year 2022 Financial Highlights
CSI’s fiscal year 2022 revenues were $236.2 million, representing a decrease of $22.8 million, or 8.8%. Gross profit margin for the full year was 73.1%.
Selling, general and administrative expenses were $170.5 million, an increase of $3.0 million, or 1.8%, compared to the year ended June 30, 2021 as a result of increased field sales activities, customer education programs and medical conferences. Research and development expenses of $36.7 million decreased $4.3 million, or 10.6%, due to in process research and development (IPR&D) charges from the acquisition of a product portfolio of peripheral microcatheters for $3.4 million in the prior-year period.
Net loss of $36.9 million, or $0.94 per basic and diluted share, compared unfavorably to net loss of $13.4 million, or $0.35 per basic and diluted share, in the prior-year period. Adjusted EBITDA was $(12.9) million, as compared to $8.6 million in the prior year.
As of June 30, 2022, CSI had cash and marketable securities totaling $159.8 million and no long-term borrowings.
Fiscal Year 2023 Guidance
Ward added, “Our guidance anticipates attractive revenue growth in fiscal 23 with a gradual improvement in the state of the U.S. healthcare system combined with strong sales execution, accelerating revenue from the sale of interventional support devices, successful new product introductions and international expansion. Guidance assumes no new Covid headwinds, a gradual improvement in US hospital staffing shortages and the full resolution of the imaging contrast shortage in September.”
For the fiscal year ending June 30, 2023, CSI anticipates:
- Revenue of $255 million to $265 million;
- Gross profit as a percentage of approximately 72% to 74% of revenues;
- Research and development expenses will be approximately 16% to 17% of revenues;
- Net loss in a range of 9% to 11% of revenues; and
- Adjusted EBITDA near break-even.
Webcast Scheduled for Tomorrow at 9:00 a.m. CT (10:00 a.m. ET)
In lieu of hosting a quarterly earnings call, CSI management will discuss fourth-quarter results at the beginning of its Capital Markets Day on August 3, 2022, at 9:00 a.m. CT (10:00 a.m. ET). To access the live webcast click here. A webcast replay will be available later the same day.
About Coronary Artery Disease (CAD)
CAD is a life-threatening condition and a leading cause of death in men and women globally. CAD occurs when a fatty material called plaque builds up on the walls of arteries that supply blood to the heart. The plaque buildup causes the arteries to harden and narrow (atherosclerosis), reducing blood flow. The risk of CAD increases if a person has one or more of the following: high blood pressure, abnormal cholesterol levels, diabetes, or family history of early heart disease. According to the Centers for Disease Control and Prevention, 18 million people in the United States have CAD, the most common form of heart disease. Heart disease claims more than 650,000 lives in the United States each year. According to estimates, arterial calcium is present in 38 percent of patients undergoing a PCI. Significant calcium contributes to poor stent delivery, expansion and wall apposition leading to poor outcomes and higher treatment costs in coronary interventions when traditional therapies are used, including a significantly higher occurrence of death and major adverse cardiac events (MACE).
About Peripheral Artery Disease (PAD)
Eighteen to 20 million Americans, most over age 65, suffer from PAD, which is caused by the accumulation of plaque in peripheral arteries reducing blood flow. Symptoms include leg pain when walking or at rest. Left untreated, PAD can lead to severe pain, immobility, non-healing wounds and eventually limb amputation. With risk factors such as diabetes and obesity on the rise, the prevalence of PAD is growing at double-digit rates.
About Cardiovascular Systems, Inc.
Cardiovascular Systems, Inc., based in St. Paul, Minn., is a medical device company focused on developing and commercializing innovative solutions for treating vascular and coronary disease. The company’s orbital atherectomy system treats calcified and fibrotic plaque in arterial vessels throughout the leg and heart and addresses many of the limitations associated with existing surgical, catheter and pharmacological treatment alternatives. For more information, visit www.csi360.com and follow us on LinkedIn and Twitter.
Certain statements in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are provided under the protection of the safe harbor for forward-looking statements provided by that Act. For example, statements in this press release regarding (i) CSI’s strategy, goals and prospects; (ii) the ongoing COVID-19 pandemic, its potential impact on our business, including trends in procedure volumes, the effects on the healthcare system, staffing shortages, patients returning for interventions, and case backlogs; (iii) expansion of our product portfolio and milestones relating thereto, including the specific products, clinical trials and experiences, and timing thereof, and the benefits to CSI; (iv) our expectations regarding attractive revenue growth, improvement in the state of the U.S. healthcare system, sales execution, accelerating revenue from the sale of interventional support devices, successful new product introductions, international expansion, Covid headwinds, staffing shortages and the resolution of the imaging contrast shortage; and (v) anticipated revenue, gross profit, research and development expenses, net loss and Adjusted EBITDA, are forward-looking statements. These statements involve risks and uncertainties that could cause results to differ materially from those projected, including, but not limited to, the ongoing COVID-19 pandemic and the impact and scope thereof on CSI, our distribution partners, the supply chain and physicians and facilities, including government actions related to the COVID-19 outbreak, material delays and cancellations of procedures, delayed spending by healthcare providers, and distributor and supply chain disruptions; regulatory developments, clearances and approvals; approval of our products for distribution in countries outside of the United States; approval of products for reimbursement and the level of reimbursement in the U.S. and other countries; dependence on market growth; agreements with third parties to sell their products; the ability of us and our distribution partners to successfully launch CSI products outside of the United States; our ability to maintain third-party supplier relationships and renew existing purchase agreements; our ability to maintain our relationships with our distribution partners; the experience of physicians regarding the effectiveness and reliability of the products we sell; the reluctance of physicians, hospitals and other organizations to accept new products; the potential for unanticipated delays in enrolling medical centers and patients for clinical trials; actual clinical trial and study results; the impact of competitive products and pricing; unanticipated developments affecting our estimates regarding expenses, future revenues and capital requirements; the difficulty of successfully managing operating costs; our ability to manage our sales force strategy; our actual research and development efforts and needs, including the timing of product development programs; successful collaboration on the development of new products; agreements with development partners, advisors and other third parties; the ability of CSI and these third parties to meet development, contractual and other milestones; contractual rights and obligations; technical challenges; our ability to obtain and maintain intellectual property protection for product candidates; our actual financial resources and our ability to obtain additional financing; fluctuations in results and expenses based on new product introductions, sales mix, unanticipated warranty claims, and the timing of project expenditures; our ability to manage costs; investigations or litigation threatened or initiated against us; court rulings and future actions by the FDA and other regulatory bodies; the effects of hurricanes, flooding, and other natural disasters on our business; the impact of federal corporate tax reform on our business, operations and financial statements; international trade developments; shutdowns of the U.S. federal government; general economic conditions; the potential impact of any future strategic transactions; and other factors detailed from time to time in CSI’s SEC reports, including…
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