Theragenics Corporation (
Q3 2011 Earnings Conference Call
November 3, 2011 11:00 AM ET
Christine Jacobs - Chairman, Chief Executive Officer
Francis Tarallo - Chief Financial Officer
Joe Munda – Sidoti & Company
Previous Statements by TGX
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Greetings and welcome to the Theragenics’ Third Quarter 2011 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions)
It is now my pleasure to introduce your host Christine Jacobs, Chairman and CEO of Theragenics. Thank you, Ms. Jacobs. You may begin.
Thank you, Melissa. Good morning all and welcome to Theragenics’ third quarter 2011 conference call. Thank you for joining us this morning. In a few minutes I’ll provide some comments on the quarter and outlook for the remainder of the year, but first Frank Tarallo, our Chief Financial Officer will provide a review of the financial results, Frank.
Thank you, Chris. This morning we released our consolidated financial results for the third quarter of 2011. If you did not receive this news release or if you would like to be added to either our fax or email distribution list, please contact 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 identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Now onto our results, our consolidated revenue was $21.1 million in the third quarter, a 3% increase over 2010. In the nine-month period, consolidated revenue was $62.9 million, a 2% increase over last year and the highest nine-month revenue in a fiscal year ever for us. Moving to profitability, EPS was $0.03 in the third quarter, an increase from the $0.02 we recorded last year. Year-to-date, EPS was also up at $0.08 this year compared to $0.05 in 2010.
Let me move now to our segment results. Revenue in our surgical products segment was $15.3 million in the third quarter, an increase of 6% over last year. For the nine months, revenue was $45.1 million, an increase of 3% over last year.
Moving to profitability, operating income in our surgical business was $780,000 in the third quarter, compared to $154,000 in third quarter last year. For the nine-month period, operating income in our surgical business was $1.1 million compared to $152,000 in last year’s nine-month period. Our results in each year were affected by special items. Please see our press release for a listing of these special items.
Turning to our Brachytherapy business, third quarter revenue was $6.1 million, a 2% decrease from last year. For the nine months, Brachy revenue was $18.3 million, a 1% increase over 2010.
Operating income in our Brachytherapy business remained healthy at $1.2 million in the third quarter, compared to $1.1 million last year. In the year-to-date period, operating income in our Brachy business was $3.8 million compared to $3.2 million last year. Our Brachy results were also impacted by special items in each year. These special items are detailed in our press release.
Returning to consolidated results, our capital expenditures were $1.7 million year-to-date, consisting primarily of expenditures for our new ERP systems. Total CapEx for the entire year is currently expected to be about $2.0 million to $2.5 million that is somewhat lower than we had been forecasting previously.
Adjusted EBITDA was a healthy $4.0 million in the third quarter and $10.9 million year-to-date. Cash flow from operations was $3.6 million in Q3 and $7.0 million for the nine months. We ended the quarter with $43.3 million in cash, cash equivalents and marketable securities. We have $24.5 million outstanding under our credit agreement resulting in a net positive position of $18.8 million.
That concludes my comments and I would now like to turn the call back over to Chris.
Thank you, Frank. Last quarter, I spoke of and listed continued uncertainties at a macro level and continuing shifts in customer behavior. Indeed, at a macro level uncertainties, volatility and unpredictable consumer behavior has recently become even more pronounced.
Last quarter’s list was long and sobering and I’m going to spare our listeners a repeat, but in spite of that list we delivered another solid quarter of results. In fact, we are performing quite well while others in the sectors are struggling.
Let me begin with the surgical products business. Revenue increased 6% over last year’s third quarter and we did have larger than usual backorders at the end of Q2 that benefited Q3. But nevertheless we think this kind of growth in this environment is impressive. This next fact is important, all three of our product platforms contributed to the revenue growth in this third quarter.
Our open orders for surgical products at the end of third quarter were $13.7 million. Now this is down from the end of the second quarter because we successfully reduced the backlog and backlogs are orders where we missed the ship dates. Our orders will continue to fluctuate in this business yet fundamental demand remains healthy.