Technology

Cardiovascular Systems (CSII) Up 6.2% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Cardiovascular Systems (CSII). Shares have added about 6.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cardiovascular Systems due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Cardiovascular Systems Loss Wider Than Estimates in Q1

Cardiovascular Systems, Inc.  reported a loss per share of 17 cents in first-quarter fiscal 2020, wider than the loss per share of 9 cents in the prior-year period. The reported figure was also wider than the Zacks Consensus Estimate of a loss of 9 cents.

Net Sales

Cardiovascular Systems’ revenues of $64.5 million in the first quarter marked a 14.6% year-over-year increase. Meanwhile, the top line beat the Zacks Consensus Estimate by 0.7%.

Segment Details

In the quarter under review, global Coronary device revenues jumped 26% year over year to $19 million. Domestic coronary revenues rose 17% to $16.3 million.  

Global peripheral revenue increased 10% to $45.5 million, led by the launch of new peripheral orbital atherectomy devices. Domestic peripheral revenue increased 10% to $45.2 million.

Total U.S. revenues increased 12% to $61.5 million while International revenue totaled just under $3 million.

Margin

Gross margin in the reported quarter was 80.3%, down 85 basis points (bps) year over year on a 19.8% rise in cost of goods sold.

Meanwhile, selling, general and administrative (SG&A) expenses rose 13.4% to $46.8 million plus research and development (R&D) expenses escalated 46.2% to $10.8 million. As a result, operating expenses increased 18.3% to $57.5 million. Operating loss in the reported quarter came in at $5.7 million, wider than the operating loss of $2.9 million in the year-ago period.

Financial Position

The company exited first-quarter fiscal 2020 with cash and cash equivalents of $58.9 million compared with $74.2 million at the end of fiscal 2019.

2020 Outlook

Cardiovascular Systems reaffirmed its fiscal 2020 guidance. The company projects revenues within $278-$283 million for fiscal 2020, indicating 12% to 14% growth over fiscal 2019. The Zacks Consensus Estimate for fiscal 2020 revenues is pegged at $280.4 million, below the company's view.

Moreover, the company reiterates gross profit margin at the band of 79-80%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.


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