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Cardiovascular Systems (CSII) Q4 Loss Narrower Than Expected

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Cardiovascular Systems, Inc. CSII reported loss of 14 cents per share for fourth-quarter fiscal 2021, narrower than loss per share of 43 cents in the prior-year period. The reported loss was also narrower than the Zacks Consensus Estimate of a loss of 17 cents.

Full-year loss per share was 35 cents compared with a loss of 79 cents a year ago. However, the metric lagged the Zacks Consensus Estimate by 7.9%.

Net Sales

Cardiovascular Systems’ revenues of $70.9 million improved 66.8% year over year. The top line surpassed the Zacks Consensus Estimate by 2.9%.

In fiscal 2021, revenues improved 9.5% to $258.9 million. The metric surpassed the Zacks Consensus Estimate by 0.8%.

Segment Details

In the quarter under review, worldwide coronary revenues grew 96% to $23.2 million. In the United States, coronary revenues increased 101% year over year, primarily led by a 102% increase in units sold and a 153% increase in the sale of coronary support products. Outside the United States, coronary revenues increased 72% to $3.6 million on continued strength in Japan combined with the successful introduction of coronary OAS in Europe.

Cardiovascular Systems, Inc. Price, Consensus and EPS Surprise

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

Cardiovascular Systems, Inc. price-consensus-eps-surprise-chart | Cardiovascular Systems, Inc. Quote

Worldwide peripheral revenues increased 56% year over year to $47.8 million. In the United States, peripheral franchise revenue increased 55%, led by a 79% increase in OBL revenues and a 46% rise in hospital revenues.

Margin

Gross margin in the reported quarter was 70.9%, down 522 basis points (bps) year over year on a 103.4% rise in cost of goods sold.

Meanwhile, selling, general and administrative expenses were up 30.7% to $45.7 million. Research and development expenses declined 21.9% to $9.2 million.

Operating expenses rose 17.4% to $54.9 million. Operating loss in the reported quarter was $4.6 million compared with operating loss of $14.4 million in the year-ago period.

Financial Position

The company exited fiscal 2021 with cash and cash equivalents of $71.1 million, compared with $185.5 million at the end of fiscal 2020.

2022 Guidance

Cardiovascular Systems has provided financial guidance for fiscal 2022.

Revenues are expected in the band of $295-$305 million, indicating growth of 14% to 18% from fiscal year 2021. The Zacks Consensus Estimate for the same is currently pegged at $302.1 million.

The company expects net loss in the range of 2-3% of revenues.

Our Take

Cardiovascular Systems’ fourth quarter of fiscal 2021 loss was narrower than the year-ago figure and the consensus mark. The company’s revenues surpassed the Zacks Consensus Estimate as well as improved on a year-over-year basis. Coronary franchise registered strong performance on solid procedure volume domestically, increased sales of procedure support products and growing adoption of orbital atherectomy internationally. Peripheral revenues registered growth in the reported quarter with a solid rebound in the hospital business and continued momentum in office-based labs. Despite the continued impact of COVID-19, international revenues were strong on continued momentum in Japan and Europe. The company has provided fiscal 2022 revenue guidance, calling for year-over-year growth.

However, escalating costs, contraction of gross margin and incurring of operating loss remain concerns. A tough competitive landscape and the company’s failure to expand business overseas are other headwinds.

Zacks Rank and Other Key Picks

The company currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space that have announced their quarterly results are West Pharmaceutical Services, Inc. WST, Encompass Health Corporation EHC and Henry Schein, Inc. HSIC.

West Pharmaceutical, carrying a Zacks Rank #1 (Strong Buy), reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Encompass Health, carrying a Zacks Rank #2, reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Revenues of $1.3 billion outpaced the consensus mark by 1.5%.

Henry Schein, carrying a Zacks Rank #2, reported second-quarter 2021 adjusted EPS of $1.11, surpassing the Zacks Consensus Estimate by 16.8%. Revenues of $2.97 billion surpassed the Zacks Consensus Estimate by 2.7%.


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