Surmodics Reports Fourth Quarter Fiscal 2016 Results

Surmodics, Inc. (Nasdaq: SRDX), a leading provider of medical device and in vitro diagnostic technologies to the healthcare industry, today announced results for its fiscal 2016 fourth quarter, ended September 30, 2016.

"The fourth quarter marked the continuation of the outstanding execution by the Surmodics team in fiscal 2016. I am proud of our accomplishments as we surpassed our fiscal 2016 financial goals and successfully integrated the Creagh Medical and NorMedix teams with Surmodics. We have also made significant progress on all key strategic growth priorities," said Gary Maharaj, president and chief executive officer. "Most notably, we have frozen the design of our first 510(k) product and completed an interim look at the data from the investigational device exemption (IDE) study of our SurVeil ® drug-coated balloon platform."

Fourth Quarter Revenue and Earnings Summary

GAAP revenue for the fiscal 2016 fourth quarter totaled $18.2 million, compared with $17.4 million a year earlier. Fourth quarter fiscal 2016 revenue included $1.3 million from Surmodics' fiscal 2016 acquisitions.

Diluted GAAP earnings per share in the fourth quarter of fiscal 2016 were $0.20 compared with $0.10 a year ago. GAAP earnings per share were impacted by increased research and development investments, accretion and amortization from acquisitions, and included a $0.04 per share tax benefit related to the adoption of a new accounting standard related to accounting for income taxes associated with stock-based compensation. On a non-GAAP basis, earnings per share were $0.26 in the fourth quarter of fiscal 2016 versus $0.34 last year.

Medical Device Segment

This segment, which includes hydrophilic coatings, device drug delivery technologies and balloon catheter products, posted revenue of $13.7 million in the fourth quarter of fiscal 2016, an increase of 5% compared to the year-ago period. The gain stems from higher reagent product sales and revenue from our fiscal 2016 acquisitions. Fiscal fourth quarter 2016 hydrophilic coating royalty and license fee revenue totaled $8.0 million, a decrease of 13% percent compared to the year-earlier period, reflecting the impact of the November 2015 expiration of U.S. patents covering Surmodics' third-generation hydrophilic coatings. The Medical Device business unit generated $4.2 million of operating income in the fourth quarter compared to $4.7 million in the prior-year quarter. Planned increases in research and development expense, as well as acquisition-related amortization and accretion expenses partly offset by higher revenue, accounted for the change in operating income.

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