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Surmodics Q4 Earnings and Revenues Beat Estimates, Margin Down
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Surmodics, Inc. (SRDX - Free Report) posted a loss per share of 13 cents in the fourth quarter of fiscal 2024 against the year-ago quarter’s earnings per share (EPS) of 53 cents. The metric beat the Zacks Consensus Estimate of a loss of 27 cents per share by 51.9%.
GAAP loss per share for the quarter was 24 cents against the year-ago EPS of 47 cents .
Revenues in Detail
Revenues of $33.2 million rose 18.8% year over year. The figure surpassed the Zacks Consensus Estimate by 8.3%.
The top line gained from solid year-over-year product sales growth from the Medical Device business, coupled with higher In Vitro Diagnostics sales.
Segmental Analysis
Surmodics operates via two reportable segments — Medical Device and IVD.
Sales in the Medical Device segment totaled $25.8 million, up 22.4% from the year-ago level. Excluding SurVeil DCB license fee revenues, Medical Device revenues increased 20% to $23.9 million. Our model’s projection for this segment’s revenues was $23.8 million.
The revenue growth in the Medical Device segment was primarily driven by product sales of $11.8 million, which rose 39% year over year, coupled with an increase in performance coating royalties and license fee revenues. Product sales growth was driven primarily by growth in sales of the Pounce thrombectomy device platform, commercial shipments of the SurVeil DCB to Abbott (Surmodics’ exclusive distribution partner for the product), and sales growth of performance coating reagents.
IVD sales improved 7.9% to $7.5 million, primarily driven by growth in sales of distributed antigen products and microarray slide/surface products. Our model’s projection for this segment’s revenues was $6.9 million.
The company also records revenues under three primary sources — Product sales, Royalties and license fees and Research, development and other fees.
In the quarter under review, Product sales amounted to $19.1 million, up 24.3% from the prior-year level. Our model’s projection for the metric was $18.6 million.
Royalties and license fees revenues totaled $11.4 million, up 13.8% from the prior-year figure. Our model’s projection for the metric was $10.4 million.
Research, development and other revenues amounted to $2.7 million, up 5% year over year. Our model’s projection for the metric was $1.6 million.
Margin Trend
In the quarter under review, Surmodics’ gross profit increased 17.7% to $24.6 million. However, the gross margin contracted 50 basis points to 74.1%. Our model projected a gross margin of 69.3% for the fiscal fourth quarter.
Selling, general & administrative expenses increased 13.8% to $14.6 million. Research and development expenses remained flat year over year at $9.7 million. Operating expenses, excluding product costs, increased 7.7% to $25.2 million.
Adjusted operating profit totaled $1.1 million, up 3.4% year over year.
Financial Position
Surmodics exited fourth-quarter fiscal 2024 with cash and cash equivalents of $36.1 million compared with $38.2 million at the end of the fiscal third quarter of 2024. Total long-term debt at the end of the fourth quarter was $29.6 million.
Net cash provided by operating activities at the end of the reported quarter was $0.2 million compared with $10.5 million a year ago.
Pending Acquisition Update
Surmodics did not provide any financial outlook for fiscal 2025 in light of the pending acquisition by GTCR, a leading private equity firm.
SRDX entered into a definitive agreement to be acquired by GTCR in May and the merger was approved by SRDX’s shareholders in August. The deal is expected to be completed by March 31, 2025, following which SRDX will become a privately held company.
Zacks Rank and Key Picks
Surmodics currently carries a Zacks Rank #3 (Hold).
ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 5.5% year to date against the industry’s 6.3% growth.
Masimo, sporting a Zacks Rank of 1 at present, has an estimated growth rate of 10.4% for 2025. MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%.
Masimo’s shares have risen 43% year to date compared with the industry’s 6.3% growth.
Globus Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.1%. Its shares have risen 55.2% year to date compared with the industry’s 6.3% growth.
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Surmodics Q4 Earnings and Revenues Beat Estimates, Margin Down
Surmodics, Inc. (SRDX - Free Report) posted a loss per share of 13 cents in the fourth quarter of fiscal 2024 against the year-ago quarter’s earnings per share (EPS) of 53 cents. The metric beat the Zacks Consensus Estimate of a loss of 27 cents per share by 51.9%.
GAAP loss per share for the quarter was 24 cents against the year-ago EPS of 47 cents .
Revenues in Detail
Revenues of $33.2 million rose 18.8% year over year. The figure surpassed the Zacks Consensus Estimate by 8.3%.
The top line gained from solid year-over-year product sales growth from the Medical Device business, coupled with higher In Vitro Diagnostics sales.
Segmental Analysis
Surmodics operates via two reportable segments — Medical Device and IVD.
Sales in the Medical Device segment totaled $25.8 million, up 22.4% from the year-ago level. Excluding SurVeil DCB license fee revenues, Medical Device revenues increased 20% to $23.9 million. Our model’s projection for this segment’s revenues was $23.8 million.
The revenue growth in the Medical Device segment was primarily driven by product sales of $11.8 million, which rose 39% year over year, coupled with an increase in performance coating royalties and license fee revenues. Product sales growth was driven primarily by growth in sales of the Pounce thrombectomy device platform, commercial shipments of the SurVeil DCB to Abbott (Surmodics’ exclusive distribution partner for the product), and sales growth of performance coating reagents.
Surmodics, Inc. Price and EPS Surprise
Surmodics, Inc. price-eps-surprise | Surmodics, Inc. Quote
IVD sales improved 7.9% to $7.5 million, primarily driven by growth in sales of distributed antigen products and microarray slide/surface products. Our model’s projection for this segment’s revenues was $6.9 million.
The company also records revenues under three primary sources — Product sales, Royalties and license fees and Research, development and other fees.
In the quarter under review, Product sales amounted to $19.1 million, up 24.3% from the prior-year level. Our model’s projection for the metric was $18.6 million.
Royalties and license fees revenues totaled $11.4 million, up 13.8% from the prior-year figure. Our model’s projection for the metric was $10.4 million.
Research, development and other revenues amounted to $2.7 million, up 5% year over year. Our model’s projection for the metric was $1.6 million.
Margin Trend
In the quarter under review, Surmodics’ gross profit increased 17.7% to $24.6 million. However, the gross margin contracted 50 basis points to 74.1%. Our model projected a gross margin of 69.3% for the fiscal fourth quarter.
Selling, general & administrative expenses increased 13.8% to $14.6 million. Research and development expenses remained flat year over year at $9.7 million. Operating expenses, excluding product costs, increased 7.7% to $25.2 million.
Adjusted operating profit totaled $1.1 million, up 3.4% year over year.
Financial Position
Surmodics exited fourth-quarter fiscal 2024 with cash and cash equivalents of $36.1 million compared with $38.2 million at the end of the fiscal third quarter of 2024. Total long-term debt at the end of the fourth quarter was $29.6 million.
Net cash provided by operating activities at the end of the reported quarter was $0.2 million compared with $10.5 million a year ago.
Pending Acquisition Update
Surmodics did not provide any financial outlook for fiscal 2025 in light of the pending acquisition by GTCR, a leading private equity firm.
SRDX entered into a definitive agreement to be acquired by GTCR in May and the merger was approved by SRDX’s shareholders in August. The deal is expected to be completed by March 31, 2025, following which SRDX will become a privately held company.
Zacks Rank and Key Picks
Surmodics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the medical industry are AngioDynamics (ANGO - Free Report) , Masimo (MASI - Free Report) and Globus Medical (GMED - Free Report) .
AngioDynamics, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 38.2% for 2025. You can seethe complete list of today’s Zacks #1 Rank stocks here.
ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 5.5% year to date against the industry’s 6.3% growth.
Masimo, sporting a Zacks Rank of 1 at present, has an estimated growth rate of 10.4% for 2025. MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%.
Masimo’s shares have risen 43% year to date compared with the industry’s 6.3% growth.
Globus Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.1%. Its shares have risen 55.2% year to date compared with the industry’s 6.3% growth.