) first-quarter fiscal 2013 earnings (excluding special items) of
22 cents per share beat the Zacks Consensus Estimate by 4 cents
and the year-ago earnings by 11 cents per share. The impressive
performance in the first quarter of fiscal 2013 (ended Dec 31,
2012) was primarily attributable to higher revenues along with a
lower tax rate.
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Quarter in Details
Adjusted revenues climbed 18.1% year over year to $13.8 million,
just shy of the Zacks Consensus Estimate of $14 million.
Increased sales of vitro diagnostics offerings and hydrophilic
coatings were the primary reasons behind the year-over-year
For the reported quarter, royalties and license fees accounted
for approximately 54.3% of the total adjusted revenues with
product sales and research & development accounting for 38.6%
and 7.1%, respectively.
We note that in calendar year 2011, SurModics received a blow
Johnson & Johnson
) stopped manufacturing Cypher and Cypher Select Plus
sirolimus-eluting coronary stents on which SurModics received
royalties on sales of the product.
Following the Nov 2011 sale of the assets of its Pharmaceuticals
division to Germany's Evonik Industries AG, SurModics operates
through two business units - Medical Devices and In Vitro
SurModics' adjusted revenues from the Medical Devices segment
came in at approximately $10.5 million, up 18.8%. Bulk of the
segmental revenues came from the sales of hydrophilic coatings,
which surged 27% from the year ago period. Revenues from the In
Vitro Diagnostics unit increased 9% to $3.3 million in the first
quarter of fiscal 2013.
During the reported quarter, the board of directors at SurModics
announced a program to buy back up to an additional $10 billion
of its common stock. We believe that the buyback program
highlights the company's commitment to create value for
Fiscal 2013 Projection
Apart from announcing its financial results, SurModics also
adjusted its outlook for fiscal 2013. SurModics now expects to
end fiscal 2013 with earnings in the range of 86 cents to 99
cents per share (prior guidance: 75 cents-87 cents per share).
SurModics continues to expect fiscal 2013 revenues in the range
of $55-$58 million. The Zacks Consensus Estimate is currently
pegged at earnings of 82 cents on revenues of $57 million for
SurModics currently carries a Zacks Rank #3 (Hold). Players in
the Medical Devices market, of which Surmodics is a part, such as
Edwards Lifesciences Corporation
) appear to be more favorably placed. Both these companies carry
a Zacks Rank #2 (Buy).