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Cardiovascular Systems (CSII) Q2 Earnings Top, Revenues Lag

Zacks Equity Research

Cardiovascular Systems, Inc. CSII reported adjusted loss per share of a penny in second-quarter fiscal 2018, against the year-ago quarter’s adjusted earnings of 3 cents.

The figure was narrower than the earlier guided range of loss per share of 6-3 cents. The figure also compared favorably with the Zacks Consensus Estimate of a loss of 4 cents.

Net Sales

Cardiovascular Systems recorded revenues of $52.6 million in the fiscal second quarter, marking a year-over-year increase of 5.1%. Also, the figure was within the guided range of $52.5-$54 million. However, revenues missed the Zacks Consensus Estimate of $53.3 million.

Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise


Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise | Cardiovascular Systems, Inc. Quote


Segment Details

Coronary device revenues increased 3.5% year over year to $13.4 million. To date, Cardiovascular Systems has sold over 3,56,000 devices to leading institutions in the United States

Meanwhile, peripheral device revenues rose 5.8% to $39.2 million on a year-over-year basis. The company added 29 new peripheral accounts and 30 coronary accounts in the fiscal second quarter.


Gross margin in the reported quarter was 81.9%, up 20 basis points (bps) year over year.

Meanwhile, selling and administrative (SG&A) expenses contracted 8.9% to $37 million and research and development (R&D) expenses were up 10.2% to $6.4 million. Resultantly, adjusted operating expenses were up 9.1% to $43.4 million.

Per management, operating expenses were lower than the earlier provided guidance due to reduced incentive compensation and payroll expenses. Operating loss was around $0.3 million, against operating income of $1.1 million in the year-ago quarter.

Financial position

The company exited the second quarter of fiscal 2018 with cash and cash equivalents of $107.3 million, compared with $104.7 million at the end of preceding quarter. The company has no long term debt.


Cardiovascular Systems updated its fiscal 2018 revenue guidance to the range of $215-$219 million, down from $226-$233 million. The current Zacks Consensus Estimate for fiscal 2018 revenues is pegged at $225.3 million, below the company’s guided range.

The company expects revenues in the range of $55-$56.5 million for third-quarter fiscal 2018. The current Zacks Consensus Estimate is pegged at $59.5 million, 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 $45.5 million for third-quarter fiscal 2018.

The company expects to incur net loss of $0.9 million to $0.0 million. Adjusted earnings per share is expected to be between negative 3 cents and breakeven. The current Zacks Consensus Estimate is pegged earnings at 3 cents, above the company’s guided range.

Our Take

Cardiovascular Systems exited second-quarter fiscal 2018 on a solid notewith year-over-year increase in both Coronary device and peripheral device segment. Overall revenues increased on a year-over-year basis on strength in both the company segments. Also, the expansion is gross margin buoys optimism. The company is putting efforts in product innovation through R&D investments. On the flipside, Cardiovascular Systems faces cutthroat competition in the niche space. Cardio Vascular incurred net loss in the recently-reported second quarter. In fact, the company has a long history of net losses since inception.

Zacks Rank & Key Releases

Cardiovascular Systems has a Zacks Rank #3 (Hold).

A few better-ranked stocks that reported solid results this earnings season are PetMed Express PETS, PerkinElmer PKI and Becton, Dickinson and Company BDX. While PetMed sports a Zacks Rank #1 (Strong Buy), PerkinElmer and Becton, Dickinson carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed recently reported third-quarter fiscal 2018 results. Adjusted earnings per share were 44 cents, up 88.3% from the prior-year quarter. Revenues rose 13.7% on a year-over-year basis to $60.1 million.

PerkinElmer reported fourth-quarter 2017 adjusted earnings per share of 97 cents. Adjusted revenues were approximately $641.6 million, up from $567 million in the year-ago quarter.

Becton, Dickinson reported first-quarter 2018 adjusted earnings per share of $2.48, up 3.9% at constant currency. Revenues totaled $3.08 billion, up 3.7% at constant currency.

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