Attached files
| file | filename |
|---|---|
| 8-K - SYNOVIS LIFE TECHNOLOGIES INC 8-K 12-14-2011 - SYNOVIS LIFE TECHNOLOGIES INC | form8k.htm |
Exhibit 99.1
| FROM: | FOR: |
| Padilla Speer Beardsley Inc. | Synovis Life Technologies, Inc |
| 1101 West River Parkway | 2575 University Ave. West |
| Minneapolis, Minnesota 55415 | St. Paul, Minnesota 55114 |
| CONTACTS: | CONTACTS: |
| Nancy A. Johnson / Marian Briggs | Richard Kramp, President and CEO |
| (612) 455-1745 / (612) 455-1742 | Brett Reynolds, CFO |
| (651) 796-7300 |
FOR IMMEDIATE RELEASE
SYNOVIS LIFE TECHNOLOGIES REPORTS 22 PERCENT REVENUE INCREASE AND EARNINGS PER SHARE OF $0.24 IN FISCAL 2011 FOURTH QUARTER
Diversified Product Portfolio Lifts Revenue 20 Percent and Net Income 74 Percent for Full Fiscal Year
ST. PAUL, Minn., December 14, 2011 ─ Synovis Life Technologies, Inc. (Nasdaq: SYNO), today reported its financial results for the fourth quarter and fiscal year ended October 31, 2011.
Yesterday, Synovis and Baxter International Inc., (NYSE:BAX) announced a definitive agreement for Baxter to acquire Synovis. The Synovis board of directors has unanimously approved the transaction and recommends that shareholders approve the agreement at an offer price of $28 per share, which equates to $325 million of equity value or approximately $260 million net of acquired cash, cash equivalents and investments. The offer price represents a 53 percent premium above Synovis’ average stock price of the four weeks prior to announcement. The transaction is expected to close in the first calendar quarter of 2012, subject to approval by Synovis’ shareholders, customary closing conditions and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
For the fiscal fourth quarter, net revenue rose to a record $22.1 million, a 22 percent increase over $18.1 million in the year-ago period. Operating income totaled $4.2 million, an 86 percent gain over operating income of $2.2 million in the year-ago period. Net income for the fiscal 2011 fourth quarter was $2.7 million, or $0.24 per diluted share, compared to net income of $1.5 million, or $0.13 per diluted share, in the fiscal 2010 fourth quarter.
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Synovis Life Technologies
December 14, 2011
Page 2
For the full fiscal year, net revenue rose to $82.4 million, up 20 percent from $68.6 million in fiscal 2010. Operating income for fiscal 2011 was $12.4 million, up 69 percent from operating income of $7.3 million last fiscal year. Net income was $8.5 million in fiscal 2011, or $0.73 per diluted share, compared to $4.9 million, or $0.43 per diluted share, in the previous fiscal year.
Conference Call Canceled
Given the acquisition announcement, Synovis Life Technologies has canceled its fourth quarter conference call which was scheduled for 10 a.m. CT today.
About Synovis Life Technologies
Synovis Life Technologies, Inc., a diversified medical device company based in St. Paul, Minn., develops, manufactures and markets biological and mechanical products used by several surgical specialties to facilitate the repair and reconstruction of soft tissue damaged or destroyed by disease or injury. The company’s products include implantable biomaterials for soft tissue repair, devices for microsurgery and surgical tools – all designed to reduce risks and/or facilitate critical surgeries, improve patient outcomes and reduce healthcare costs. For additional information on Synovis Life Technologies and its products, visit the company’s website at www.synovislife.com.
Forward-looking statements contained in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements can be identified by words such as “should”, “could”, “may”, “will”, “expect”, “believe”, “anticipate”, “estimate”, “continue”, or other similar expressions. Certain important factors that could cause results to differ materially from those anticipated by the forward-looking statements made herein include whether and when the proposed acquisition by Baxter International, Inc. will be consummated, the timing of product introductions, the ability of the sales force to grow and sustain revenues, the impact of increased competition in various markets Synovis serves, the ability to grow Orthopedic and Wound revenue and achieve profitability, outcomes of clinical and marketing studies as well as regulatory submissions, the number of certain surgical procedures performed, the ability to identify, acquire and successfully integrate suitable acquisition candidates, any operational or financial impact from the current global economic environment, the impact of healthcare reform legislation, as well as other factors found in the Company’s filings with the Securities and Exchange Commission, such as the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended October 31, 2010.
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Synovis Life Technologies
December 14, 2011
Page 3
SYNOVIS LIFE TECHNOLOGIES, INC.
Consolidated Statements of Income (unaudited)
(In thousands, except per share data)
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Three Months Ended
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Twelve Months Ended
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|||||||||||||||
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October 31,
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October 31,
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|||||||||||||||
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2011
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2010
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2011
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2010
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Net revenue
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$ | 22,053 | $ | 18,116 | $ | 82,363 | $ | 68,565 | ||||||||
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Cost of revenue
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5,874 | 5,026 | 22,343 | 19,025 | ||||||||||||
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Gross margin
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16,179 | 13,090 | 60,020 | 49,540 | ||||||||||||
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Gross margin percentage
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73 | % | 72 | % | 73 | % | 72 | % | ||||||||
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Selling, general and administrative expenses
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10,955 | 9,554 | 42,949 | 37,812 | ||||||||||||
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Research and development expenses
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1,065 | 1,296 | 4,709 | 4,393 | ||||||||||||
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Operating expenses
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12,020 | 10,850 | 47,658 | 42,205 | ||||||||||||
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Operating income
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4,159 | 2,240 | 12,362 | 7,335 | ||||||||||||
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Interest income
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83 | 73 | 311 | 284 | ||||||||||||
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Income before provision for income taxes
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4,242 | 2,313 | 12,673 | 7,619 | ||||||||||||
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Provision for income taxes
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1,527 | 833 | 4,212 | 2,743 | ||||||||||||
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Net income
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$ | 2,715 | $ | 1,480 | $ | 8,461 | $ | 4,876 | ||||||||
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Basic earnings per share
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$ | 0.24 | $ | 0.13 | $ | 0.74 | $ | 0.43 | ||||||||
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Diluted earnings per share
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$ | 0.24 | $ | 0.13 | $ | 0.73 | $ | 0.43 | ||||||||
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Weighted average shares outstanding - basic
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11,344 | 11,284 | 11,381 | 11,262 | ||||||||||||
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Weighted average shares outstanding - diluted
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11,486 | 11,449 | 11,571 | 11,441 | ||||||||||||
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Synovis Life Technologies
December 14, 2011
Page 4
SYNOVIS LIFE TECHNOLOGIES, INC.
Consolidated Revenues (unaudited)
(In thousands)
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Three Months Ended
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Twelve Months Ended
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|||||||||||||||
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October 31,
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October 31,
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|||||||||||||||
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2011
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2010
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2011
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2010
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Peri-Strips
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$ | 6,614 | $ | 5,153 | $ | 23,675 | $ | 19,414 | ||||||||
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Tissue-Guard
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4,970 | 4,221 | 18,407 | 16,550 | ||||||||||||
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Veritas
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3,956 | 3,661 | 15,829 | 14,368 | ||||||||||||
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Microsurgery
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4,326 | 3,123 | 15,190 | 11,020 | ||||||||||||
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Orthopedic and Wound
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752 | 685 | 3,514 | 1,878 | ||||||||||||
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Surgical tools and other
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1,435 | 1,273 | 5,748 | 5,335 | ||||||||||||
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Total Revenue
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$ | 22,053 | $ | 18,116 | $ | 82,363 | $ | 68,565 | ||||||||
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Domestic
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$ | 18,675 | $ | 15,247 | $ | 70,130 | $ | 57,700 | ||||||||
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International
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3,378 | 2,869 | 12,233 | 10,865 | ||||||||||||
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Total Revenue
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$ | 22,053 | $ | 18,116 | $ | 82,363 | $ | 68,565 | ||||||||
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Synovis Life Technologies
December 14, 2011
Page 5
SYNOVIS LIFE TECHNOLOGIES, INC.
Consolidated Balance Sheets
As of October 31, 2011 (unaudited) and October 31, 2010
(In thousands, except share and per share data)
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October 31,
2011
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October 31, 2010
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 18,013 | $ | 12,951 | ||||
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Short-term investments
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41,203 | 41,119 | ||||||
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Accounts receivable, net
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11,262 | 8,701 | ||||||
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Inventories
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9,998 | 9,433 | ||||||
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Deferred income tax asset, net
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447 | 367 | ||||||
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Other current assets
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1,973 | 1,715 | ||||||
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Total current assets
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82,896 | 74,286 | ||||||
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Investments, net
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7,335 | 7,854 | ||||||
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Property, plant and equipment, net
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4,154 | 3,401 | ||||||
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Goodwill
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3,620 | 3,620 | ||||||
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Other intangible assets, net
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5,764 | 6,182 | ||||||
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Deferred income tax asset, net
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2,166 | 2,139 | ||||||
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Total assets
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$ | 105,935 | $ | 97,482 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$ | 2,235 | $ | 1,644 | ||||
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Accrued expenses
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7,780 | 6,371 | ||||||
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Total current liabilities
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10,015 | 8,015 | ||||||
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Total liabilities
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10,015 | 8,015 | ||||||
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Shareholders’ equity:
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||||||||
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Preferred stock: authorized 5,000,000 shares of $.01 par value; none issued or outstanding at both dates
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--- | --- | ||||||
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Common stock: authorized 20,000,000 shares of $.01 par value; issued and outstanding 11,167,690 and 11,228,654 at October 31, 2011 and October 31, 2010, respectively
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112 | 112 | ||||||
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Additional paid-in capital
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59,832 | 61,780 | ||||||
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Accumulated other comprehensive (loss) income
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(34 | ) | 26 | |||||
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Retained earnings
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36,010 | 27,549 | ||||||
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Total shareholders’ equity
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95,920 | 89,467 | ||||||
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Total liabilities and shareholders’ equity
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$ | 105,935 | $ | 97,482 | ||||
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Synovis Life Technologies
December 14, 2011
Page 6
SYNOVIS LIFE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
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For the fiscal years ended October 31,
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2011
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2010
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income
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$ | 8,461 | $ | 4,876 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization of property, plant and equipment
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1,154 | 1,228 | ||||||
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Amortization of intangible assets
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734 | 782 | ||||||
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Amortization of investment premium, net
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1,263 | 1,626 | ||||||
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Provision for uncollectible accounts
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250 | 204 | ||||||
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Stock-based compensation
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1,231 | 1,455 | ||||||
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Tax benefit from stock option exercises
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(522 | ) | (296 | ) | ||||
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Loss on sale or disposal of property, plant and equipment
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25 | 192 | ||||||
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Deferred income taxes
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(107 | ) | (117 | ) | ||||
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Changes in operating assets and liabilities:
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||||||||
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Accounts receivable
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(2,811 | ) | (1,980 | ) | ||||
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Inventories
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(565 | ) | (1,709 | ) | ||||
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Other current assets
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(258 | ) | 40 | |||||
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Accounts payable
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591 | (318 | ) | |||||
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Accrued expenses
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1,931 | 920 | ||||||
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Net cash provided by operating activities
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11,377 | 6,903 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of property, plant and equipment
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(1,932 | ) | (1,102 | ) | ||||
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Investments in identifiable intangible assets
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(316 | ) | (125 | ) | ||||
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Purchases of investments
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(51,116 | ) | (79,397 | ) | ||||
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Redemptions of investments
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50,228 | 73,618 | ||||||
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Net cash used in investing activities
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(3,136 | ) | (7,006 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Net proceeds related to stock-based compensation plans
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3,879 | 1,996 | ||||||
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Repurchase of the Company's common stock
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(7,580 | ) | (5,101 | ) | ||||
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Excess tax benefit of stock option exercises
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522 | 296 | ||||||
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Net cash used in financing activities
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(3,179 | ) | (2,809 | ) | ||||
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Net change in cash and cash equivalents
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5,062 | (2,912 | ) | |||||
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Cash and cash equivalents at beginning of year
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12,951 | 15,863 | ||||||
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Cash and cash equivalents at end of year
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$ | 18,013 | $ | 12,951 | ||||
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