Cardiovascular Systems, Inc. CSII reported adjusted earnings per share of 2 cents in fourth-quarter fiscal 2017, reflecting massive improvement from the year-ago quarter’s adjusted loss of 15 cents a share. The quarter’s number compared favorably with the Zacks Consensus Estimate of a loss of 5 cents.
The year-over-year improvement was primarily backed by revenue growth and lower operating expenses on account of the company’s cost realignment actions.
Full-year adjusted earnings came in at a loss of 6 cents per share, narrower than the year-ago loss of $1.72. Also, the loss figure was 53.8% narrower than the Zacks Consensus Estimate of a loss of 13 cents.
The Numbers in Details
Cardiovascular Systems posted revenues of $52.9 million in the fiscal fourth quarter, marking a year-over-year increase of 9.2%. The figure also surpassed the Zacks Consensus Estimate of $52 million.
Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise
Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise | Cardiovascular Systems, Inc. Quote
Fiscal 2017 registered revenues of $204.91 million, up 14.9% from the year-ago number. Also, revenues outpaced the Zacks Consensus Estimate of $204.03 million.
Per management, the company received approvals for the new orbital atherectomy devices that give physicians more tools to effectively and routinely treat patients suffering from coronary and peripheral artery disease. Also, the approval of Diamondback 360 Coronary Orbital Atherectomy System Micro Crown in Japan marks the company’s first international expansion, beginning in calendar year 2018.
To date, Cardiovascular Systems sold over 324,000 devices to leading institutions across the U.S. The company added 43 new peripheral accounts and 39 coronary accounts in the fiscal fourth quarter. Coronary device revenues improved 15.3% year over year to $13.2 million and peripheral device revenues rose 7.3% to $39.8 million.
Gross margin in the reported quarter was 81.7%, up 206 basis points (bps) year over year, primarily on account of a 9.2% rise in revenues.
Meanwhile, selling and administrative (SG&A) expenses contracted 4.4% to $35.9 million and research and development (R&D) expenses were up 4.9% to $6.3 million. The resultant adjusted operating expenses decreased 3.1% to $42.2 million, primarily exhibiting management’s cost realignment initiatives. Consequently, operating profit was around $1.0 million, improving from a loss of $4.9 million a year ago.
The company exited the fourth quarter of fiscal 2017 with cash and cash equivalents of $107.9 million, compared with $103.1 million at the end of third-quarter fiscal 2017.
Cardiovascular Systems issued its first-quarter fiscal 2018 and fiscal 2018 guidance. The company expects revenues in the range of $226–$233 million in fiscal 2018. The current Zacks Consensus Estimate for fiscal 2018 revenues is pegged at $231.40 million, which is within the company’s guidance.
The company also expects revenues in the range of $52.6–$53.6 million for the first quarter of fiscal 2018. The current Zacks Consensus Estimate is pegged at $54.11 million, slightly above the company’s guided range.
Moreover, the company expects gross profit to account for 81% of revenues, while operating expenses are estimated at around $45 million for first-quarter fiscal 2018.
The company expects to incur net loss of $2.8–$2.2 million or loss per share of 9–7 cents in the first quarter fiscal 2018. The current Zacks Consensus Estimate is pegged at a breakeven, above the company’s guided range.
Cardiovascular Systems delivered remarkable fourth-quarter 2017 results with earnings and revenues beating the Zacks Consensus Estimate. Also, Cardiovascular Systems’ fiscal 2017 performance has been impressive. The company’s lower operating expenses drove the year-over-year improvement in earnings. Strong revenue performance also contributed to the upside in earnings. Moreover, the improvement in margins is encouraging. The company’s fiscal 2018 guidance also instills confidence in investors.
The company achieved several milestones during the quarter. Notably, it has received FDA approval for radial access Diamondback 360 Peripheral Orbital Atherectomy Device. The one-year results from LIBERTY 360 study is to be presented at the 2017 Amputation Prevention Symposium (AMP).
Zacks Rank & Key Picks
Cardiovascular Systems currently has a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Edwards Lifesciences Corporation EW, INSYS Therapeutics, Inc. INSY and Align Technology, Inc. ALGN. Notably, Edwards Lifesciences INSYS Therapeutics and Align Technology sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
INSYS Therapeutics has a long-term expected earnings growth rate of 20%. The stock has gained around 2.5% over the last three months.
Align Technology has an expected long-term adjusted earnings growth of almost 26.6%. The stock has added roughly 27.3% over the last three months.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has gained around 3.4% over the last three months.
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