SurModics Management Discusses F1Q 2011 Results - Earnings Call Transcript

SurModics, Inc. ( SRDX)

F1Q 2011 (Qtr End December 31, 2010) Earnings Call

January 26, 2011 5:00 p.m. ET


Phil Ankeny - SVP, CFO

Gary Maharaj - CEO


Ross Taylor - C.L. King & Associates

Ernie Andberg - Feltl & Company

Suraj Kalia - Rodman & Renshaw

Beth Lilly - Gabelli Funds

Daniel Owczarski - Avondale Partners



Good day, ladies and gentlemen, thank you for standing by. Welcome to the SurModics First Quarter 2011 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. If you have a question, please press star followed by the 1 on your touchtone phone. If you'd like to withdraw your question, please press the star followed by the 2. And if you're using speaker equipment, please lift the handset before making your selection.

This conference is being recorded today, Wednesday, January 26, 2011.

I would now like to turn the conference over to Mr. Phil Ankeny, Senior Vice President and Chief Financial Officer. Please go ahead, sir.

Phil Ankeny

Thank you, Camille [ph]. Good afternoon and welcome to SurModics fiscal first quarter 2011 conference call. Thank you for joining us today.

Our press release reporting quarterly results was issued earlier this afternoon and is available on our website at Before we begin, it is my duty to inform you that this conference call is being webcast and is accessible through the Investor Relations section of the SurModics website where the audio recording of the webcast will also be archived for future reference.

I will remind you that some of the statements made during this call may be considered forward-looking. The 10-K for fiscal year 2010 identifies certain factors that could cause the company's actual results to differ materially from those projected in any forward-looking statements made during this call. The company does not undertake any duty to update any forward-looking statements as a result of new information or future events or developments.

Joining me on the call today is Gary Maharaj, our new Chief Executive Officer. As you know, Gary officially took the helm as CEO on December 27, 2010. He comes to us with 23 years experience in the medical device industry, most recently as CEO of Arizant, Inc.

During his tenure at Arizant, he helped to refocus and refine its core business which ultimately resulted in improved operating and financial results. In fact, under Gary's leadership, Arizant nearly doubled annual revenues to over $200 million in less than five years. Additionally, Gary brings a strong background in R&D leadership to SurModics from his earlier years as the head of R&D at Arizant and in various management and research positions for the orthopedic implant and rehabilitation divisions of Smith & Nephew.

As you listen to Gary's comments today, I believe the parallel between his accomplishments over his career and the opportunities here at SurModics will be quite evident. We are thrilled to have Gary onboard at SurModics and are excited to be able to leverage his expertise and leadership.

On today's call Gary will discuss his reasons for joining SurModics and provide his initial observations and a broad overview of his outlook for the company. Afterwards I will highlight financial results and key achievements for the quarter. I will also comment on our financial outlook for fiscal 2011. And finally we will open the call to take your questions.

With that, let me turn the call over to Gary.

Gary Maharaj

Thank you, Phil. It's my pleasure to join all today for my first earnings conference call with SurModics.

There are two things that I want to talk about today, first, why am I here? And second, I'll provide a high-level perspective of SurModics based on my initial observation. So let's talk about why I'm here.

When I first became aware of the opportunity to become the CEO at SurModics, I immediately became excited at the prospect of leading the company for several compelling reasons. I believe that the ability to improve a medical device by surface modification is an important and ever-growing need in healthcare and that SurModics has the leadership position in this technology.

Furthermore, I believe that a company with a competitive edge in cost-effective and clinically-relevant surface modification can have a major positive impact in healthcare. Finally, working with high-impact medical technology, seeing them help patients and in the process becoming commercially successful is personally important and rewarding to me.

After further diligence and discussions with the board and management, my interest grew because I felt a fit with the team and their keen interest in improving the financial and competitive strength of the company. Bottom line, I saw an opportunity to build upon SurModics' leadership position, its broad technology platform, and to work with its talented employees, all with the goal of having a positive impact in patient outcomes and creating value for our shareholders and customers both current and future.

Now it's been just over four weeks since I joined SurModics, and while I'm still getting acclimated, I've learned a great deal already from my interactions with employees and customers. My first order of business as CEO was to begin establishing trust and confidence with our employees, especially given the changes in the company during the past year.

've been impressed by not just the strength and quality of our employees, but their tenacity and desire to create a better future. I believe that our employees are proud of the work they do and are loyal to this organization. Importantly, they share my sense of urgency in restoring the 30-plus-year legacy of SurModics and returning our business to profitable growth. I'm enjoying working closely with them as we draw [ph] the future.

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