Kensey Nash Corporation (Kensey), a medical devices company, has reported total revenues of $20.6 million for the third quarter of fiscal 2009, compared with the total revenues of $20.5 million in the year-ago quarter. It has also reported net income of $4.9 million, or $0.42 diluted earnings per share, for the third quarter of fiscal 2009, compared with net income of $3.5 million, or $0.28 diluted earnings per share, in the year-ago quarter.
Third Quarter Fiscal 2009 Highlights
EBITDA of $9.2 million.
Operating margin of 37%.
Operating cash flow of $8.4 million.
Biomaterial sales of $12.9 million, representing an increase of 3% from third quarter of prior fiscal year.
Endovascular sales of $947,000, representing a decrease of 39% from third quarter of prior fiscal year.
Angio-Seal royalties of $5.3 million, essentially flat from third quarter of prior fiscal year. The negative impact of foreign currency translation decreased third quarter royalties by approximately $300,000.
Record orthopaedic royalties of $1.5 million, representing an increase of 27% from third quarter of prior fiscal year.
IDE submission for Cartilage US clinical trial in February 2009.
OsseoFit(TM) CE Mark Approval obtained in March 2009.
President and chief executice officer commentary
“Our third quarter performance was strong both from an operating perspective, as well as our product development pipeline,” said Joe Kaufmann, President and CEO of the company. “Third quarter revenue and earnings have kept pace with our targets despite the ongoing difficult economic environment. Our balance sheet continues to be strengthened by generating $8.4 million in operating cash flow this quarter, and $22.0 million for the nine months ended March 31, 2009. We currently expect our operating cash flow for fiscal 2009 will be approximately $29.0 million. Royalty income of $6.7 million remained solid primarily due to the 27% increase in our orthopaedic royalties. We continue to make progress on our cartilage repair and extracellular matrix technology programs.”
Nine Months Fiscal 2009 Results
Revenues: Sales and Royalties. Total revenues for the nine months of fiscal 2009 were $61.6 million, up 6% from total revenues of $57.8 million in the prior fiscal year nine-month period.
Net sales increased 7% to $41.3 million for the first nine months of fiscal 2009 from $38.8 million in the comparable prior fiscal year period. Net sales of biomaterials products increased 13%, to $38.7 million from $34.2 million in the comparable prior fiscal year period, due to strong sales in both cardiovascular and orthopaedic product lines. Cardiovascular sales of $13.8 million, consisting primarily of sales of vascular closure product components to St. Jude Medical, increased 18%, from $11.7 million in the prior fiscal year period. Orthopaedic sales increased 8%, to $22.8 million from $21.1 million in the prior fiscal year period, primarily due to increased sales of products in the company’s sports medicine product portfolio, which increased 15% over the prior fiscal year nine months.
Sales of endovascular products during the first nine months of fiscal 2009 decreased 43% to $2.6 million from $4.6 million in the prior fiscal year period. Although overall net unit sales to Spectranetics increased compared with prior fiscal year end-user unit sales, the reduced transfer pricing more than offset the increase in units.
Royalty income increased 6% to $20.2 million for the nine months ended March 31, 2009 when compared with $19.0 million in the comparable prior fiscal year period.
Earnings Per Share. The company reported diluted earnings per share of $1.28 for the nine months ended March 31, 2009.
In the nine-month period ended March 31, 2009, the total tax-effected impact on earnings per share of equity compensation expense was $0.06, a decrease from $0.25 in the prior year comparable period as a result of the fiscal 2008 acceleration of stock awards triggered by a third party’s significant open market purchase of the company’s Common Stock, as well as favorable mark-to-market adjustments on outstanding Stock Appreciation Rights in the current nine-month period, offset in small part by the inclusion in equity compensation expense for the fiscal 2009 period of amortization for an additional year of equity grants caused by the fiscal 2008 acceleration of equity awards.
During the nine-month period, the company generated cash from operations of $22.0 million and had $75.5 million of cash and investment balances and total debt of $33.1 million at March 31, 2009.