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Theragenics Corporation (TGX)
Q3 2009 Earnings Call Transcript
November 5, 2009 11:00 am ET
Christine Jacobs – Chairman, President and CEO
Frank Tarallo – CFO and Treasurer
Previous Statements by TGX
» Theragenics Corporation Q2 2009 Earnings Call Transcript
» Theragenics Corporation Q1 2009 Earnings Call Transcript
» Theragenics Q4 2008 Earnings Call Transcript
I would now like to turn the conference over to Ms. Christine Jacobs, Chairman and CEO. Please go ahead ma’am.
Thank you, Carisa, and good morning. Thank you for joining us today as well. Welcome to Theragenics third quarter 2009 conference call. I will be providing my comments on the quarter and our outlook for the last quarter of the year and beyond in a couple of minutes. But first, Frank Tarallo, our Chief Financial Officer is going to provide a review of the financial results. Frank?
Thank you, Chris. This morning, we released our consolidated financial results for the third quarter of 2009. If you did not receive this news release or if you would like to be added to either our fax or e-mail distribution list, please contact our Investor Relations at 800-998-8479 or 770-271-0233.
Before I begin my review, please be aware that some comments made during this conference call may contain forward-looking statements involving risks and uncertainties regarding our operations and future results.
Please see our press release issued today and our filings with the Securities and Exchange Commission, including without limitation the company’s Form 10-K and Forms 10-Q which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Now our results; first, let me remind you that we acquired NeedleTech Products in July 2008. So NeedleTech results are included in our consolidated results for all of 2009, but not for two months in the 2008 periods.
Our consolidated revenue was $19.3 million in the third quarter and $59.6 million for the nine-month period. Our revenue is best analyzed on a segment basis, which I will talk address in a minute.
Consolidated net income in the third quarter was $799,000 or $0.02 per share compared to $641,000 or $0.02 per share last year. For the first nine months of this year, our net income was $2.7 million or $0.08 per share compared to $3.9 million or $0.12 per share last year.
We had a number of items that affected comparability between the 2009 and 2008 periods. If you are trying to follow along, all of these items are listed in our press release. The most significant affects on our consolidated net income were as follows.
First, in 2008, we had $590,000 of non-cash charges related to the NeedleTech acquisition. These charges did not recur in 2009. Second, our R&D expenses increased in 2009, a result of the R&D program we implemented late last year. R&D expenses were $148,000 higher in the third quarter and $1 million higher in the first nine months of this year compared to 2008.
Third, our interest income declined this year. Interest income decreased $167,000 in the third quarter and decreased $906,000 in the first nine months of this year compared to ’08. This was due to the lower returns available on our investments this year.
Now I would like to review our segment results. First, let me remind you of a change we made this to the manner in which we allocate the cost of corporate activities to our business segments.
Operating expenses associated with corporate activities are now allocated based on the relative revenue of each business segment. We believe this method more accurately reflects the utilization our resources. We also utilized this method internally to review results and allocate resources.
Previously, nearly, all of the expenses associated with corporate activities were charged to the brachytherapy segment. Our 2008 segment results have been restated to reflect this change. This is simply a change in the way we allocate corporate costs among our businesses. This has no affect on the consolidated results we previously reported for the 2008 periods.
I mentioned earlier that NeedleTech is included in the entire period of our 2009 results, but only for two months in our results from last year. So revenue in our surgical products business is a higher relative portion of our consolidated revenue this year. This means that a greater portion of our corporate costs are being allocated to our surgical products business in 2009 versus 2008.
Now to the numbers; revenue in our surgical products segment was $13.4 million in the quarter and $40.2 million in the nine-month period of this year. On a pro forma basis as if NeedleTech results were included in the entire 2008 period, this represents organic growth of 6% for the quarter and 8% year-to-date.
Operating income in our surgical business was $623,000 in the third quarter compared to $202,000 last year. For the first nine months of 2009, operating income was $1.5 million compared to $1.7 million last year.
I would like to point out three items that had a significant affect on the comparability of year-over-year results in our surgical products business. First, the 2008 periods included the $590,000 of non-cash acquisition-related charges that I mentioned earlier and these charges did not recur this year.