Core Viewpoint - Surmodics, Inc. reported a narrower-than-expected adjusted loss per share of 4 cents for the first quarter of fiscal 2025, compared to breakeven in the same quarter last year, and better than the Zacks Consensus Estimate of a loss of 8 cents per share [1][14]. Financial Performance - The company registered revenues of $29.9 million in the fiscal first quarter, a decrease of 2.1% year over year, missing the Zacks Consensus Estimate by 10.6% [3][14]. - GAAP loss per share for the quarter was 26 cents, wider than the loss of 6 cents per share in the prior year [2]. - Surmodics' gross profit increased by 3.4% year over year to $22.5 million, with a gross margin expansion of 400 basis points to 75.2% [10][14]. - Selling, general & administrative expenses rose by 21% year over year to $15.2 million, while research and development expenses increased by 3.2% to $8.9 million [11]. Segment Analysis - Surmodics operates through two segments: Medical Device and In Vitro Diagnostics (IVD) [5]. - Medical Device segment sales were $23.3 million, down 1.1% year over year, with a notable decline in product sales of 15% to $10.1 million [5][6]. - IVD sales declined by 5.2% year over year to $6.6 million, primarily due to unfavorable order timing [7]. Revenue Sources - Product sales totaled $16.5 million, down 12.1% from the prior year [8]. - Royalties and license fees revenues increased by 15.9% to $10.6 million [8]. - Research, development, and other revenues rose by 7.6% to $2.7 million [9]. Financial Position - At the end of the first quarter of fiscal 2025, Surmodics had cash and cash equivalents of $30.1 million, down from $36.1 million at the end of fiscal 2024 [12]. - Total long-term debt was $29.59 million, slightly up from $29.55 million at the end of fiscal 2024 [12]. Future Outlook - Surmodics did not provide guidance on the pending acquisition by GTCR LLC [13]. - The company received FDA's 510(k) clearance for its Pounce XL Thrombectomy System, which is expected to expand its market potential [15].

Core Insights - SurModics reported revenue of $29.92 million for the quarter ended December 2024, reflecting a year-over-year decline of 2.1% and an EPS of -$0.04 compared to $0.00 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $33.45 million, resulting in a surprise of -10.55%, while the EPS exceeded expectations with a surprise of +50.00% against a consensus estimate of -$0.08 [1] Revenue Breakdown - Product sales amounted to $16.55 million, which is below the estimated $20.33 million, representing a year-over-year decline of 12.1% [4] - Revenue from research, development, and other sources was $2.74 million, slightly above the estimated $2.69 million, showing a year-over-year increase of 7.6% [4] - Royalties and license fees generated $10.63 million, surpassing the average estimate of $10.46 million, with a year-over-year growth of 15.9% [4] Stock Performance - Over the past month, SurModics shares have returned -9.7%, contrasting with the Zacks S&P 500 composite's increase of +1.2% [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), suggesting potential for outperformance in the near term [3]

Company Performance - SurModics reported a quarterly loss of $0.04 per share, better than the Zacks Consensus Estimate of a loss of $0.08, and compared to break-even earnings per share a year ago, representing an earnings surprise of 50% [1] - The company posted revenues of $29.92 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 10.55%, and down from $30.55 million year-over-year [2] - SurModics has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Stock Outlook - SurModics shares have declined approximately 9.7% since the beginning of the year, while the S&P 500 has gained 2.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.04 on revenues of $34.65 million, and $0.19 on revenues of $142.88 million for the current fiscal year [7] Industry Context - The Medical - Products industry, to which SurModics belongs, is currently ranked in the bottom 48% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Revenue Performance - Surmodics reported total revenue of $29.9 million for the first quarter of fiscal 2025, a decrease of $0.6 million or 2% compared to the prior-year quarter[96]. - Medical Device segment revenue was $23.3 million, reflecting a 1% decrease from $23.5 million in the prior-year quarter[96]. - Product sales in the Medical Device segment decreased by 15% to $10.1 million, primarily due to a decline in SurVeil commercial revenue[96]. - Product sales decreased by $2.3 million, or 12%, to $16.5 million in Q1 fiscal 2025 compared to $18.8 million in Q1 fiscal 2024[100]. - IVD product sales decreased by 6% to $6.4 million in Q1 fiscal 2025, primarily due to unfavorable order timing[106]. Revenue Growth Areas - SurVeil DCB license fee revenue was $1.3 million in the first quarter of fiscal 2025, compared to $1.0 million in the same quarter of fiscal 2024, marking a 29% increase[98]. - Performance coating royalties and license fee revenue increased by 14% to $9.4 million, driven by growth in customer utilization of Serene™ hydrophilic coating[98]. - The Pounce thrombectomy device platform continues to show growth, partially offsetting declines in SurVeil revenue[97]. Expenses and Financial Performance - R&D expenses increased by 3%, or $0.3 million, to $8.9 million, representing 30% of total revenue in Q1 fiscal 2025[104]. - SG&A expenses rose by 21%, or $2.6 million, to $15.2 million, accounting for 51% of total revenue in Q1 fiscal 2025[105]. - Product gross profit fell by $0.9 million, or 9%, to $9.1 million, with product gross margins increasing to 55.1% from 53.2% year-over-year[102]. - Total segment operating income increased by $0.2 million to $3.1 million, with the Medical Device segment reporting an operating income of $0.2 million[109]. Cash Flow and Liquidity - Cash used in operating activities was $(7.9) million in Q1 fiscal 2025, an improvement from $(8.8) million in the prior-year period[112]. - Working capital decreased by $2.1 million to $58.7 million as of December 31, 2024[116]. - As of December 31, 2024, the company had cash and cash equivalents totaling $30.1 million, with expectations for sufficient liquidity to meet cash needs and fund operations in fiscal 2025[119]. - The company generated $0.1 million from the sale of common stock related to stock-based compensation plans in the first three months of fiscal 2025, compared to $0.0 million in the same period of fiscal 2024[119]. Debt and Financing - The company expects total interest expense under its credit agreement to be approximately $3.5 million in fiscal 2025[117]. - The company has a revolving credit facility with a maximum availability of $25 million, with an outstanding balance of $5 million as of December 31, 2024[120]. - The term loan outstanding principal was $25 million as of December 31, 2024, with an interest rate fixed at 10.205% per annum for five years[120]. - The company may seek additional liquidity sources, including borrowing or equity financing, to support future cash flow needs[121]. Future Outlook - The company expects a decline of approximately $6.0 million in SurVeil DCB product revenue for fiscal 2025 compared to fiscal 2024[97]. - Future cash requirements will depend on the market introduction and acceptance of products, including the SurVeil DCB distributed by Abbott[121]. - The company anticipates significant SG&A and R&D expenses related to medical device sales and product development in fiscal 2025[119]. - The TRANSCEND pivotal clinical trial is anticipated to be completed in the second quarter of fiscal 2025[98]. Legal and Compliance - The Company maintains effective disclosure controls and procedures as of December 31, 2024, ensuring timely reporting and decision-making regarding required disclosures[133]. - There were no changes in internal control over financial reporting during the three months ended December 31, 2024, that materially affected the internal control[134]. - The Company is involved in various legal actions related to its operations, products, and technologies, including intellectual property and employment disputes[136]. Currency and Market Risks - The company has not entered into any foreign currency forward exchange contracts to hedge against currency fluctuations, exposing it to Euro currency risk[131]. - The company expects ongoing operating losses and interest expenses, which could impact growth initiatives and cash flow generation[125]. Customer Concentration - Abbott and Medtronic are the largest customers, accounting for 16% and 12% of consolidated revenue for fiscal 2024, respectively[122].

Financial Performance - Total revenue for Q1 FY2025 was $29.9 million, a decrease of 2% year-over-year from $30.6 million in Q1 FY2024[4] - Medical Device revenue decreased by $0.3 million, or 1%, to $23.3 million, while In Vitro Diagnostics revenue decreased by $0.4 million, or 5%, to $6.6 million[5][6] - GAAP net loss was $(3.7) million, or $(0.26) per diluted share, compared to a net loss of $(0.8) million, or $(0.06) per diluted share in the prior-year period[9] - Adjusted EBITDA for Q1 FY2025 was $3.6 million, down from $3.9 million in Q1 FY2024[10] - Product sales decreased by 12% to $16,548,000 in Q1 2025 from $18,827,000 in Q1 2024[22] - Net loss for the quarter was $3,651,000, compared to a net loss of $786,000 in the prior year[22] - Adjusted EBITDA for the quarter was $3,641,000, a decrease of 7% from $3,934,000 in Q1 2024[31] - The company reported a basic net loss per share of $0.26, compared to a loss of $0.06 per share in the prior year[22] Cash and Assets - The company reported $30.1 million in cash and investments as of December 31, 2024, with a decrease of $10.0 million in cash and investments during the quarter[11] - Cash and cash equivalents decreased to $30,145,000 from $36,115,000 at the end of the previous quarter[24] - Total assets decreased to $163,740,000 from $178,562,000 at the end of the previous quarter[24] - Total liabilities decreased to $51,971,000 from $59,665,000 at the end of the previous quarter[24] Operating Costs - Operating costs increased by $2.9 million, or 13%, primarily due to merger-related charges[8] - Total operating costs and expenses increased to $32,403,000, up from $30,874,000 in the same quarter last year[22] - The company reported merger-related charges of $2,264 million for the three months ended December 31, 2024, which were not tax deductible[34] Merger and Acquisition - The company is engaged with the FTC regarding the pending acquisition by GTCR, with the goal of completing the merger by the end of Q2 FY2025[4][15] - Merger agreement with GTCR values Surmodics at approximately $627 million, with shareholders set to receive $43.00 per share in cash[4][14] - The company is undergoing a proposed acquisition by GTCR, which has resulted in specific merger-related expenses[36] Product Performance - Product gross margin improved to 55.1%, up from 53.2% in the prior-year period, driven by a favorable product mix[7] - Medical Device revenue, excluding SurVeil DCB license fees, was $22,030,000, down 2% from $22,574,000 year-over-year[28] - The company recognized revenue from SurVeil DCB license fee under the Development and Distribution Agreement with Abbott[36] Shareholder Information - The diluted weighted average shares outstanding for the three months ended December 31, 2024, were 14,231 million[34]

Core Viewpoint - Surmodics, Inc. (SRDX) has shown strong performance in its latest quarter, with a narrower loss per share and sales exceeding market estimates, driven by its thrombectomy business [1][2]. Financial Performance - Surmodics reported a loss per share that was 51.9% narrower than market estimates and sales that beat estimates by 8.3% [1]. - The company achieved sales of $25.8 million in the Medical Device segment, reflecting a 22.4% increase year-over-year, primarily due to product sales from the Pounce thrombectomy device platform and SurVeil DCB [7]. - IVD sales improved by 7.9% to $7.5 million, driven by growth in distributed antigen and microarray slide/surface products [7]. Acquisition Details - Surmodics has entered into a definitive agreement to be acquired by GTCR for an estimated total equity valuation of $627 million, with shareholders set to receive $43.00 per share in cash [2][5]. - The current market price of SRDX shares is around $37, suggesting a potential gain of nearly 15% upon the deal's closure by the end of March [5]. Growth Prospects - Surmodics projects a remarkable 97.2% growth for fiscal 2025 and has consistently surpassed earnings estimates in the past four quarters, with an average surprise of 165.93% [3]. - The company is optimistic about leveraging its proprietary Pounce thrombectomy platform technology, with early results from a study presented at the TCT Symposium and FDA clearance for the Pounce XL Thrombectomy System [6]. Estimate Trends - The Zacks Consensus Estimate for Surmodics' earnings per share for fiscal 2025 has improved by 1 cent to 19 cents, with first-quarter fiscal 2025 revenue estimates at $33.5 million, indicating a 9.5% increase year-over-year [11].

Core Viewpoint - SurModics (SRDX) is experiencing significant selling pressure, with a 10.4% decline over the past four weeks, but is now positioned for a potential trend reversal as it is in oversold territory and analysts expect better earnings than previously predicted [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is used to identify oversold stocks, with a reading below 30 indicating oversold conditions [2] - SRDX has an RSI reading of 11.17, suggesting that the heavy selling may be exhausting itself and a trend reversal could occur soon [5] Group 2: Fundamental Indicators - There is strong consensus among sell-side analysts that earnings estimates for SRDX will increase, with a 5.7% rise in the consensus EPS estimate over the last 30 days [6] - An upward trend in earnings estimate revisions typically leads to price appreciation in the near term [6] Group 3: Analyst Ratings - SRDX holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [7]

SurModics (SRDX) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Indi ...

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - SurModics (SRDX) is identified as a promising growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company operates in the drug delivery technology sector, which is currently experiencing significant growth potential [3] Group 2: Earnings Growth - SurModics has a historical EPS growth rate of 4.5%, but projected EPS growth for this year is expected to be 153.1%, significantly surpassing the industry average of 20% [4] Group 3: Asset Utilization - The asset utilization ratio for SurModics is 0.7, indicating that the company generates $0.7 in sales for every dollar in assets, which is higher than the industry average of 0.61 [5] Group 4: Sales Growth - The company's sales are projected to grow by 13.2% this year, compared to the industry average of only 0.7% [6] Group 5: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for SurModics, with the Zacks Consensus Estimate for the current year increasing by 6.3% over the past month [8] - This trend supports the stock's Zacks Rank of 1 (Strong Buy) and a Growth Score of B [8] Group 6: Investment Potential - The combination of strong earnings growth, efficient asset utilization, and positive sales growth positions SurModics favorably for outperformance, making it an attractive option for growth investors [9]

Surmodics, Inc. (SRDX) posted a loss per share of 13 cents in the fourth quarter of fiscal 2024 against the year-ago quarter’s earnings per share (EPS) of 53 cents. The metric beat the Zacks Consensus Estimate of a loss of 27 cents per share by 51.9%.GAAP loss per share for the quarter was 24 cents against the year-ago EPS of 47 cents .Revenues in DetailRevenues of $33.2 million rose 18.8% year over year. The figure surpassed the Zacks Consensus Estimate by 8.3%.The top line gained from solid year-over-year ...