ARDEN HILLS, Minn., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Intricon Corporation (NASDAQ: IIN), an international company engaged in designing, developing, engineering and manufacturing miniature interventional, implantable and body-worn medical devices, today announced financial results for its third quarter ended September 30, 2020.
"Third quarter results included both year-over-year and sequential revenue growth as we see improvement across all our target medical markets. Continued emphasis on expense control while leveraging our core competencies to enter new medical markets for long-term growth remains a priority," said Scott Longval, President and Chief Executive Officer. "Our acquisition of Emerald Medical Services earlier this year is already demonstrating a meaningful contribution, while our directed focus on partnerships with innovators entering the emerging hearing health market is gaining traction."
Third Quarter Highlights:
• Revenue of $27.4 million compared to $26.9 million in the prior year
Diabetes revenue declined 7.7% year-over-year
Other medical revenue increased 81.6% year-over-year, which included the contribution from recently acquired Emerald Medical Services
• Gross margin of 26.3%, compared to 25.2% in the prior year period
• Net income per diluted share of $0.07 versus net loss of $0.03 per diluted share in the prior year period
Third Quarter 2020 Financial Results
For the 2020 third quarter, the company reported net revenue of $27.4 million versus $26.9 million in the comparable prior-year period.
Revenue in Intricon’s Medical business was $20.6 million, an increase from $19.1 million in the comparable prior-year period. The year-over-year increase was driven primarily by our medical coils business and the impact of Emerald Medical Services which the company acquired in May 2020, partially offset by the reduction in orders due to uncertainty surrounding the COVID-19 pandemic.
Hearing Health revenue was $5.5 million in the third quarter of 2020 compared to $6.4 million in the prior-year third quarter. The revenue decline during the third quarter was largely attributed to the absence of hi Health Innovations revenue and a reduction in advertising as part of the Hearing Help Express restructuring efforts.
Gross margin in the third quarter of 2020 was 26.3%, compared to 25.2% in the prior-year third quarter, primarily due to the cost reduction initiatives and higher volumes.
Operating expenses for the third quarter were $6.7 million, compared to $7.2 million in the comparable prior-year period. The change in operating expenses year over year was due to the cost reduction initiatives.
The company posted a net income of $0.6 million or $0.07 per diluted share in the third quarter of 2020, versus net loss of $0.3 million or $0.03 per diluted share, for the 2019 third quarter.
Conference Call
Intricon will hold a conference call today, November 9, 2020, beginning at 4:00 p.m. CT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by dialing 866-795-7248 for domestic callers or 470-495-9160 for international callers, using conference ID: 6348919. A live and archived webcast will be available on the “Investors” sections of the company’s website at: www.Intricon.com.
Forward-Looking Statements
Statements made in this release and in Intricon’s other public filings and releases that are not historical facts or that include forward-looking terminology, including estimates of future results, the impact of the Emerald acquisition, statements regarding the estimated costs and expenses of the restructuring and estimated annual expense savings, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be affected by known and unknown risks, uncertainties and other factors that are beyond Intricon’s control, including without limitation, the impacts of the COVID-19 pandemic and measures taken in response, the risks associated with the Emerald acquisition, , and may cause Intricon’s actual results, performance or achievements to differ materially from the results, performance and achievements expressed or implied in the forward-looking statements. These risks, uncertainties and other factors are detailed from time to time in the company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2019 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.
About Intricon Corporation
Headquartered in Arden Hills, Minn., Intricon Corporation designs, develops and manufactures miniature interventional, implantable and body-worn devices. These advanced products help medical, healthcare and professional communications companies meet the rising demand for smaller, more intelligent and better-connected devices. Intricon has facilities in the United States, Asia, and Europe. The company’s common stock trades under the symbol “IIN” on the NASDAQ Global Market. For more information about Intricon, visit www.intricon.com.
Investor Contact
Leigh Salvo
(415) 937-5404
investorrelations@intricon.com
INTRICON CORPORATION
MARKET REVENUE
(Unaudited)
| THIRD QUARTER |
| YEAR TO DATE | ||||||||||||||
($ in 000's) | 2020 |
| 2019 |
| Change |
| 2020 |
| 2019 |
| Change | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Medical | $ | 20,649 |
| $ | 19,099 |
| 8.1 | % |
| $ | 55,125 |
| $ | 60,784 |
| -9.3 | % |
Diabetes |
| 14,518 |
|
| 15,723 |
| -7.7 | % |
|
| 41,569 |
|
| 50,837 |
| -18.2 | % |
Other Medical |
| 6,131 |
|
| 3,376 |
| 81.6 | % |
|
| 13,556 |
|
| 9,947 |
| 36.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Hearing Health |
| 5,491 |
|
| 6,358 |
| -13.6 | % |
|
| 13,845 |
|
| 20,044 |
| -30.9 | % |
Value Based Direct-to-End-Consumer |
| 953 |
|
| 1,510 |
| -36.9 | % |
|
| 3,513 |
|
| 4,876 |
| -28.0 | % |
Value Based Indirect-to-End-Consumer |
| 1,779 |
|
| 2,443 |
| -27.2 | % |
|
| 3,888 |
|
| 7,419 |
| -47.6 | % |
Legacy OEM |
| 2,759 |
|
| 2,405 |
| 14.7 | % |
|
| 6,444 |
|
| 7,749 |
| -16.8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Professional Audio Communications |
| 1,227 |
|
| 1,436 |
| -14.6 | % |
|
| 3,502 |
|
| 4,972 |
| -29.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total | $ | 27,367 |
| $ | 26,893 |
| 1.8 | % |
| $ | 72,472 |
| $ | 85,800 |
| -15.5 | % |
INTRICON CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
|
| Three Months Ended |
|
| Nine Months Ended | |||||||||
(unaudited) |
| September 30, |
|
| September 30, |
|
| September 30, |
|
| September 30, | |||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Revenue, net | $ | 27,367 |
| $ | 26,893 |
|
| $ | 72,472 |
|
| $ | 85,800 |
|
Cost of goods sold |
| 20,169 |
|
| 20,120 |
|
|
| 54,096 |
|
|
| 62,253 |
|
Gross profit |
| 7,198 |
|
| 6,773 |
|
|
| 18,376 |
|
|
| 23,547 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
| |||
Sales and marketing |
| 1,365 |
|
| 2,609 |
|
|
| 5,038 |
|
|
| 9,071 |
|
General and administrative |
| 3,654 |
|
| 3,715 |
|
|
| 11,673 |
|
|
| 10,551 |
|
Research and development |
| 1,458 |
|
| 840 |
|
|
| 3,868 |
|
|
| 2,902 |
|
Restructuring charges |
| - |
|
| - |
|
|
| 1,171 |
|
|
| - |
|
Impairment loss |
| - |
|
| - |
|
|
| - |
|
|
| 3,765 |
|
Other operating expenses |
| 253 |
|
| - |
|
|
| 746 |
|
|
| - |
|
Total operating expenses |
| 6,730 |
|
| 7,164 |
|
|
| 22,496 |
|
|
| 26,289 |
|
Operating income (loss) |
| 468 |
|
| (391 | ) |
|
| (4,120 | ) |
|
| (2,742 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||
Interest income, net |
| 41 |
|
| 240 |
|
|
| 322 |
|
|
| 703 |
|
Other income (expense), net |
| 192 |
|
| (52 | ) |
|
| 293 |
|
|
| (458 | ) |
Income (loss) from continuing operations before income taxes and discontinued operations |
| 701 |
|
| (203 | ) |
|
| (3,505 | ) |
|
| (2,497 | ) |
Income tax expense |
| 47 |
|
| 87 |
|
|
| 94 |
|
|
| 334 |
|
Income (loss) from continuing operations before discontinued operations |
| 654 |
|
| (290 | ) |
|
| (3,599 | ) |
|
| (2,831 | ) |
Loss on disposal of discontinued operations |
| - |
|
| - |
|
|
| - |
|
|
| (1,116 | ) |
Loss from discontinued operations |
| - |
|
| - |
|
|
| - |
|
|
| (597 | ) |
Net income (loss) |
| 654 |
|
| (290 | ) |
|
| (3,599 | ) |
|
| (4,544 | ) |
Less: Income allocated to non-controlling interest |
| 10 |
|
| - |
|
|
| 17 |
|
|
| - |
|
Net income (loss) attributable to IntriCon shareholders | $ | 644 |
| $ | (290 | ) |
| $ | (3,616 | ) |
| $ | (4,544 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic income (loss) per share attributable to IntriCon shareholders: |
|
|
|
|
|
|
|
|
|
|
| |||
Continuing operations | $ | 0.07 |
| $ | (0.03 | ) |
| $ | (0.41 | ) |
| $ | (0.32 | ) |
Discontinued operations |
| - |
|
| - |
|
|
| - |
|
|
| (0.20 | ) |
Net income (loss) per share: | $ | 0.07 |
| $ | (0.03 | ) |
| $ | (0.41 | ) |
| $ | (0.52 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||
Diluted income (loss) per share attributable to IntriCon shareholders: |
|
|
|
|
|
|
|
|
|
|
| |||
Continuing operations | $ | 0.07 |
| $ | (0.03 | ) |
| $ | (0.41 | ) |
| $ | (0.32 | ) |
Discontinued operations |
| - |
|
| - |
|
|
| - |
|
|
| (0.20 | ) |
Net income (loss) per share: | $ | 0.07 |
| $ | (0.03 | ) |
| $ | (0.41 | ) |
| $ | (0.52 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||
Average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| |||
Basic |
| 8,936 |
|
| 8,764 |
|
|
| 8,877 |
|
|
| 8,738 |
|
Diluted |
| 9,272 |
|
| 8,764 |
|
|
| 8,877 |
|
|
| 8,738 |
|
INTRICON CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEET
(In Thousands, Except Share Amounts)
(unaudited) |
| September 30, |
|
| December 31, | ||
|
| 2020 |
|
| 2019 | ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents | $ | 16,081 |
|
| $ | 8,523 |
|
Restricted cash |
| 647 |
|
|
| 639 |
|
Short-term investment securities |
| 14,176 |
|
|
| 23,451 |
|
Accounts receivable, less provision for doubtful accounts of $365 at September 30, 2020 and $325 at December 31, 2019 |
| 9,192 |
|
|
| 8,993 |
|
Inventories |
| 20,463 |
|
|
| 16,377 |
|
Contract assets |
| 10,592 |
|
|
| 10,237 |
|
Other current assets |
| 1,426 |
|
|
| 1,975 |
|
Current assets of discontinued operations |
| - |
|
|
| 80 |
|
Total current assets |
| 72,577 |
|
|
| 70,275 |
|
|
|
|
|
|
| ||
Machinery and equipment |
| 45,083 |
|
|
| 41,073 |
|
Less: Accumulated depreciation |
| 30,915 |
|
|
| 27,522 |
|
Net machinery and equipment |
| 14,168 |
|
|
| 13,551 |
|
|
|
|
|
|
| ||
Goodwill |
| 13,714 |
|
|
| 9,551 |
|
Intangible assets |
| 11,282 |
|
|
| 5,545 |
|
Operating lease right-of-use assets, net |
| 3,812 |
|
|
| 4,372 |
|
Investment in partnerships |
| 623 |
|
|
| 1,160 |
|
Long-term investment securities |
| - |
|
|
| 8,629 |
|
Other assets, net |
| 289 |
|
|
| 510 |
|
Total assets | $ | 116,465 |
|
| $ | 113,593 |
|
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Current financing leases | $ | 34 |
|
| $ | 101 |
|
Current operating leases |
| 1,512 |
|
|
| 1,729 |
|
Accounts payable |
| 8,340 |
|
|
| 9,876 |
|
Accrued salaries, wages and commissions |
| 4,271 |
|
|
| 2,274 |
|
Other accrued liabilities |
| 4,429 |
|
|
| 2,869 |
|
Liabilities of discontinued operations |
| - |
|
|
| 77 |
|
Total current liabilities |
| 18,586 |
|
|
| 16,926 |
|
|
|
|
|
|
| ||
Noncurrent financing leases |
| 2 |
|
|
| 30 |
|
Noncurrent operating leases |
| 2,475 |
|
|
| 2,937 |
|
Other postretirement benefit obligations |
| 349 |
|
|
| 382 |
|
Accrued pension liabilities |
| 667 |
|
|
| 655 |
|
Deferred tax liabilities, net |
| 1,104 |
|
|
| - |
|
Other long-term liabilities |
| 3,790 |
|
|
| 2,171 |
|
Total liabilities |
| 26,973 |
|
|
| 23,101 |
|
Commitments and contingencies |
|
|
|
|
| ||
Shareholders’ equity: |
|
|
|
|
| ||
Common stock, $1.00 par value per share; 20,000 shares authorized; 8,943 and 8,781 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively |
| 8,943 |
|
|
| 8,781 |
|
Additional paid-in capital |
| 88,908 |
|
|
| 86,770 |
|
Accumulated deficit |
| (7,902 | ) |
|
| (4,286 | ) |
Accumulated other comprehensive loss |
| (474 | ) |
|
| (520 | ) |
Total shareholders' equity |
| 89,475 |
|
|
| 90,745 |
|
Non-controlling interest |
| 17 |
|
|
| (253 | ) |
Total equity |
| 89,492 |
|
|
| 90,492 |
|
Total liabilities and equity | $ | 116,465 |
|
| $ | 113,593 |
|