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ARDEN HILLS, Minn., Aug. 06, 2019 (GLOBE NEWSWIRE) -- IntriCon Corporation (NASDAQ: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature body-worn devices, today announced financial results for its second quarter ended June 30, 2019.
“Over the past several quarters, we have taken important steps towards best positioning our business for the growth opportunities we see emerging in Medical Biotelemetry and Hearing Health, including bolstering our leadership team, expanding our manufacturing facilities, and realigning certain areas of our hearing health business. Our recent restructuring efforts will have a substantial effect on our bottom line, while at the same time allowing us to focus resources on new growth opportunities,” said Mark Gorder, president and chief executive officer of IntriCon. “We remain confident in our ability to achieve our long-term goals and secure our position as the partner of choice in micro-miniature device production.”
Second Quarter 2019 Financial Results
For the 2019 second quarter, the company reported net revenue of $29.3 million versus $29.4 million in the comparable prior-year period. Revenue excludes contributions from the discontinued operations of its UK Limited subsidiary.
Revenue in IntriCon’s Medical business in the second quarter of 2019 was $20.9 million, an increase from $20.2 million in the comparable prior-year period. Growth was driven primarily by sales to diabetes and medical coil customers.
Hearing Health revenue was $6.7 million in the second quarter of 2019 compared to $7.7 million in the prior-year second quarter. The revenue decline during the quarter was largely attributed to order delays associated with restructuring activity within a large insurance customer’s hearing health business that are expected to continue through the remainder of 2019.
Gross margin in the second quarter of 2019 was 28%, down from 33% in the prior-year second quarter. Gross margins were constrained by ongoing validation and qualification expense and excess capacity related to the recent manufacturing expansion to meet the anticipated higher volume requirements of our existing and future customers.
Operating expenses for the second quarter were $11.6 million, compared to $6.7 million in the comparable prior-year period. The increase stemmed from the $3.8 million write-off of Hearing Help Express goodwill and intangible assets, higher non-cash stock compensation expense, increased advertising investments in our Direct-to-End-Consumer business and support costs related to key new business development initiatives.
The company posted a net loss of approximately $5.0 million or $0.57 per diluted share in the second quarter of 2019, versus net income of approximately $2.0 million or $0.25 per diluted share, for the 2018 second quarter. The company reported a second-quarter net loss from continuing operations of $3.5 million, or $0.40 per diluted share, which includes the Hearing Help Express goodwill and intangible asset write-off of approximately $3.8 million, or $0.43 per diluted share.
As previously announced, IntriCon revised its guidance for the full year 2019. The company anticipates revenue in the range of $115 million to $117.5 million and gross margins in the range of 27% to 28.5% for the full year 2019.
IntriCon’s management team will hold a conference call today, Tuesday, August 6, 2019, 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: 5294699. A live and archived webcast will be available on the “Investors” sections of the company’s website at: www.IntriCon.com.
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, are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be affected by known and unknown risks, uncertainties and other factors that are beyond IntriCon’s control, 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, 2018. 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 and micro-miniature 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.
|SECOND QUARTER||YEAR TO DATE|
|($ in 000's)||2019||2018||Change||2019||2018||Change|
|Value Based Direct-to-End-Consumer||1,736||2,052||-15.4||%||3,366||3,837||-12.3||%|
|Value Based Indirect-to-End-Consumer||2,399||2,634||-8.9||%||4,976||4,608||8.0||%|
|Professional Audio Communications||1,769||1,520||16.4||%||3,536||3,349||5.6||%|
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
|Three Months Ended||Six Months Ended|
|June 30,||June 30,||June 30,||June 30,|
|Cost of goods sold||21,121||19,727||42,133||36,202|
|Sales and marketing||3,072||2,637||6,461||5,240|
|General and administrative||3,650||2,751||6,836||5,502|
|Research and development||1,097||1,316||2,062||2,475|
|Total operating expenses||11,584||6,704||19,124||13,217|
|Operating income (loss)||(3,369||)||3,017||(2,351||)||4,606|
|Interest income (expense), net||248||(211||)||463||(405||)|
|Other expense, net||(272||)||(196||)||(406||)||(401||)|
|Income (loss) from continuing operations before income taxes and discontinued operations||(3,393||)||2,610||(2,294||)||3,800|
|Income tax expense||116||269||247||455|
|Income (loss) from continuing operations before discontinued operations||(3,509||)||2,341||(2,541||)||3,345|
|Loss on disposal of discontinued operations||(1,116||)||-||(1,116||)||-|
|Loss from discontinued operations, net of income taxes||(405||)||(333||)||(597||)||(570||)|
|Net income (loss)||$||(5,030||)||$||2,008||$||(4,254||)||$||2,775|
|Basic income (loss) per share attributable to IntriCon shareholders:|
|Net income (loss) per share:||$||(0.57||)||$||0.29||$||(0.49||)||$||0.40|
|Diluted income (loss) per share attributable to IntriCon shareholders:|
|Net income (loss) per share:||$||(0.57||)||$||0.25||$||(0.49||)||$||0.35|
|Average shares outstanding:|
CONSOLIDATED CONDENSED BALANCE SHEET
(In Thousands, Except Per Share Amounts)
|June 30,||December 31,|
|Cash, cash equivalents and restricted cash||$||9,801||$||8,047|
|Accounts receivable, less allowance for doubtful accounts of $308 at June 30, 2019 and $807 at December 31, 2018||9,746||11,266|
|Other current assets||1,216||2,146|
|Current assets of discontinued operations||648||1,205|
|Total current assets||66,466||84,544|
|Machinery and equipment||39,155||36,725|
|Less: Accumulated depreciation||26,276||25,303|
|Net machinery and equipment||12,879||11,422|
|Intangible assets, net||-||2,585|
|Operating lease right of use asset||4,396||-|
|Investment in partnerships||1,445||2,091|
|Other assets, net||6,234||3,427|
|Noncurrent assets of discontinued operations||-||371|
|Current financing leases||$||102||$||-|
|Current operating leases||1,620||-|
|Accrued salaries, wages and commissions||3,456||4,409|
|Other accrued liabilities||4,260||4,031|
|Liabilities of discontinued operations||606||336|
|Total current liabilities||22,044||21,647|
|Noncurrent financing leases||69||-|
|Noncurrent operating leases||2,971||-|
|Other postretirement benefit obligations||355||377|
|Accrued pension liabilities||737||706|
|Other long-term liabilities||1,224||544|
|Commitments and contingencies|
|Common stock, $1.00 par value per share; 20,000 shares authorized; 8,754 and 8,664 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively||8,754||8,664|
|Additional paid-in capital||85,729||84,999|
|Accumulated other comprehensive loss||(538||)||(927||)|
|Total shareholders' equity||89,181||92,227|
|Total liabilities and equity||$||116,328||$||115,248|