Surmodics, Inc (NASDAQ:SRDX) Q4 2023 Earnings Conference Call February 2, 2024 8:00 AM ET Company Participants Gary Maharaj - President and Chief Executive Officer Tim J. Arens - Senior Vice President of Finance and Information Technology and Chief Financial Officer Conference Call Participants Brooks O'Neil - Lake Street Capital Markets. Mike Matson - Needham James Sidoti - Sidoti & Company Operator Welcome everyone to the Surmodics First Quarter of Fiscal Year 2024 Earnings Call. Please note that this cal ...

Revenue Performance - Revenue for the first quarter of fiscal 2024 was $30.6 million, a 23% increase from $24.9 million in the prior-year quarter[75]. - Medical Device revenue increased 24% to $23.5 million in the first quarter of fiscal 2024, compared to $19.0 million in the prior-year quarter[76]. - Product sales in the Medical Device segment rose 43% to $12.0 million, driven by the initial stocking order for the SurVeil DCB from Abbott[78]. - In Vitro Diagnostics revenue was $7.0 million, an 18% increase from $5.9 million in the prior-year quarter[77]. - Performance coating royalties and license fee revenue increased to $8.2 million in Q1 fiscal 2024, up from $7.5 million in the prior-year quarter[89]. Expenses and Profitability - R&D expense decreased 32% to $8.7 million in the first quarter of fiscal 2024, compared to $12.7 million in the prior-year quarter[81]. - SG&A expense decreased 5% to $12.5 million, with a percentage of revenue dropping from 53% to 41%[82]. - Product gross profit increased 12% to $10.0 million, with product gross margins at 53.2% compared to 63.0% in the prior-year quarter[79]. - Medical Device segment reported an operating loss of $(0.2) million in Q1 fiscal 2024, a significant improvement from $(7.2) million in the prior-year quarter, representing (1)% of revenue[86]. - In Vitro Diagnostics segment reported operating income of $3.1 million in Q1 fiscal 2024, with product gross margins decreasing to 61.4% from 69.4% year-over-year[88]. - Medical Device product gross profit increased by $0.9 million year-over-year in Q1 fiscal 2024, but gross margins decreased to 48.6% from 58.6%[89]. Cash Flow and Liquidity - Cash used in operating activities was $(8.8) million in Q1 fiscal 2024, an improvement from $(10.8) million in the same prior-year period[89]. - Cash used in investing activities totaled $(8.4) million in Q1 fiscal 2024, compared to $(1.0) million in the same prior-year period[91]. - Cash and cash equivalents decreased to $35.2 million as of December 31, 2023, down from $45.4 million as of September 30, 2023[93]. - Cash and cash equivalents totaled $35.2 million as of December 31, 2023, expected to support operations and planned capital expenditures for fiscal 2024[96]. - The company held $11.8 million in available-for-sale debt securities as of December 31, 2023, with interest rate fluctuations having an insignificant impact on results[104]. Future Outlook - For fiscal 2024, the company expects R&D expenses to decrease by $5.5 million to $6.5 million compared to fiscal 2023[81]. - Anticipated increase in SG&A expenditures between $2.0 million and $3.0 million for fiscal 2024, alongside significant R&D expenses primarily for medical device product development[96]. - Future cash requirements will depend on market acceptance of medical device products, including the SurVeil DCB, and potential corporate transactions[97]. - The company may seek additional liquidity through borrowing, debt or equity financing, or corporate transactions, with no assurance of favorable terms[97]. Customer and Market Dynamics - Abbott and Medtronic are the largest customers, contributing 27% and 10% of consolidated revenue for fiscal 2023, and 19% and 10% for the three months ended December 31, 2023, respectively[98]. - The Pounce thrombectomy device platform continues to see sales growth, contributing to overall revenue increases[78]. Risk Factors - The company is exposed to Euro currency risk due to manufacturing operations in Ireland and sales denominated in Euros, which may affect revenue and expenses[107]. - Interest rate swap transaction fixes the one-month Term SOFR portion of interest rate on $25.0 million of term loans at 4.455%, resulting in an effective interest rate of 10.205%[105]. - Management believes that a reasonable change in raw material prices would not materially impact future earnings or cash flows[106]. Accounting and Compliance - No significant changes in critical accounting policies were reported for the three months ended December 31, 2023[99]. - Total interest expense under the credit agreement with MidCap is expected to be approximately $3.5 million for fiscal 2024[94]. - Working capital totaled $63.3 million as of December 31, 2023, an increase of $0.6 million from September 30, 2023[93].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 0-23837 Surmodics, Inc. (Exact name of Registrant as specified in its Charter) Minnesota 41-1356149 (State or other ju ...

Financial Performance - In Q4 2023, the company generated total revenue of $28 million, representing an 8% year-over-year growth, exceeding the high end of guidance which implied 5% growth [32][74] - Total revenue for fiscal 2023 reached $133 million, a 33% increase year-over-year, including $29.6 million from SurVeil DCB license fees [38][91] - Adjusted EBITDA for Q4 was $1.7 million, a $4.2 million improvement compared to the same quarter last year [36][89] - The company ended fiscal 2023 with over $45 million in cash and investments [39][90] Business Segment Performance - Revenue from the Medical Device segment grew 8% year-over-year to $21 million, with a 15% growth excluding SurVeil license fee revenue [33][81] - The IVD segment returned to growth in Q4, increasing 7% year-over-year to $6.9 million, as customers normalized purchasing patterns [35][60] - Pounce and Sublime sales exceeded $1 million in revenue for the third consecutive quarter, contributing to a 22% growth in Medical Device segment product sales for the year [57][70] Market Dynamics - The SurVeil DCB addresses a $1 billion market opportunity in peripheral artery disease, with approximately 500,000 procedures performed annually in the US [47] - The company expects the commercial launch of SurVeil DCB in the first half of calendar 2024, supported by Abbott's strong sales and marketing presence [44][49] - The FDA's updated view on paclitaxel-coated devices is expected to positively impact market adoption [48] Strategic Direction - The company aims to drive growth through the commercialization of SurVeil, Pounce, and Sublime products, while also enhancing its Medical Device Performance Coatings and IVD businesses [72] - R&D investments will focus on winning in identified market segments, particularly in the venous market [12][96] - The company plans to maintain cash efficiency while pursuing growth opportunities [73][104] Management Commentary - Management expressed confidence in the timeline for Abbott's commercialization of SurVeil, with potential for earlier or later launches [2][11] - The company is focused on disciplined expense management and optimizing working capital to support long-term growth [73][104] - Management highlighted the importance of follow-on products in the thrombectomy market to remain competitive [117] Other Important Information - The company received FDA clearance for its Preside coating technology, which is expected to enhance performance in various medical applications [62][64] - The company anticipates a decrease in R&D expenses to approximately $43 million to $44 million in fiscal 2024, reflecting a focus on key projects [96] Q&A Session Question: How should the market view the potential of SurVeil given the $100 million development fees from Abbott? - Management expressed confidence that SurVeil is within the expected performance limits and highlighted Abbott's strong sales footprint following their acquisition of CSI [108][110] Question: What is the strategy for going to market with high-potential products in the pipeline? - Management emphasized the need for follow-on products in the thrombectomy market and the importance of cash efficiency while expanding the product portfolio [117][119]

2 3 • Year Founded: 1979 • Multiple, innovative vascular intervention devices to accelerate revenue growth, including expected commercialization of our SurVeil™ drug coated balloon by our partner Abbott during the first half of calendar 2024 • Strong balance sheet, and access to capital, to support strategic initiatives Gary R. Maharaj President and Chief Executive Officer (Joined 2010) Teryl L.W. Sides Senior Vice President and President of Vascular Interventions (Joined 2018) Core Businesses: Medical Devi ...

Surmodics, Inc. (NASDAQ:SRDX) Q3 2023 Earnings Conference Call August 2, 2023 8:00 AM ET Company Participants Gary Maharaj - President & Chief Executive Officer Timothy Arens - Chief Financial Officer Conference Call Participants Brooks O’Neil - Lake Street Capital Markets Michael Matson - Needham & Company Michael Petusky - Barrington Research James Sidoti - Sidoti & Company Operator Welcome everyone to Surmodics Third Quarter of Fiscal Year 2023 Earnings Call. Please note that this call is being webcast. ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Presents the company's unaudited financial position, operations, and cash flows for the periods ended June 30, 2023 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased, driven by a rise in cash and new long-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | September 30, 2022 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $44,579 | $18,998 | +$25,581 | | Total Current Assets | $85,850 | $57,587 | +$28,263 | | Goodwill | $43,844 | $40,710 | +$3,134 | | Total Assets | $188,901 | $158,359 | +$30,542 | | **Liabilities & Equity** | | | | | Short-term borrowings | $0 | $10,000 | -$10,000 | | Income tax payable | $11,953 | $0 | +$11,953 | | Long-term debt, net | $29,353 | $0 | +$29,353 | | Total Liabilities | $76,489 | $49,967 | +$26,522 | | Total Stockholders' Equity | $112,412 | $108,392 | +$4,020 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) A significant license fee drove a 111% revenue increase and a shift to net income in Q3 2023 Statements of Operations Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $52,483 | $24,854 | $104,614 | $73,963 | | Royalties and license fees | $34,153 | $8,795 | $52,347 | $26,738 | | Operating income (loss) | $21,412 | $(7,143) | $7,600 | $(15,484) | | Net income (loss) | $7,346 | $(5,651) | $(8,230) | $(12,546) | | Diluted net income (loss) per share | $0.52 | $(0.41) | $(0.59) | $(0.90) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned positive and financing activities provided significant cash from new debt Cash Flow Summary (Nine Months Ended June 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9,264 | $(14,723) | | Net cash (used in) provided by investing activities | $(2,170) | $4,802 | | Net cash provided by (used in) financing activities | $17,987 | $(673) | | **Net change in cash and cash equivalents** | **$25,581** | **$(11,079)** | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Financial%20Statements) Details a significant milestone payment from Abbott, new credit facilities, and segment performance - In June 2023, the company received FDA Premarket Approval (PMA) for its SurVeil™ drug-coated balloon (DCB), triggering a **$27 million milestone payment** from its commercialization partner, Abbott[23](index=23&type=chunk)[25](index=25&type=chunk) - On October 14, 2022, the company entered into a new credit agreement with MidCap, drawing down a **$25 million term loan** and a **$5 million revolving credit facility**[43](index=43&type=chunk)[44](index=44&type=chunk) - In Q2 2023, the company initiated a spending reduction and workforce restructuring plan, resulting in a **$1.3 million charge** for severance and related costs[70](index=70&type=chunk)[92](index=92&type=chunk) Revenue by Segment (Nine Months Ended June 30, in thousands) | Segment | Revenue 2023 | Revenue 2022 | % Change | | :--- | :--- | :--- | :--- | | Medical Device | $84,739 | $52,889 | +60% | | In Vitro Diagnostics | $19,875 | $21,074 | -6% | | **Total Revenue** | **$104,614** | **$73,963** | **+41%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes significant revenue growth from the Abbott milestone payment and improved liquidity from new debt [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q3 revenue grew 111% to $52.4 million, shifting the company to a $21.4 million operating income Revenue Breakdown (Q3 2023 vs Q3 2022, in thousands) | Revenue Stream | Q3 2023 | Q3 2022 | % Change | | :--- | :--- | :--- | :--- | | **Medical Device** | **$46,014** | **$17,528** | **+163%** | | - Product sales | $9,299 | $6,741 | +38% | | - License fees | $25,933 | $1,024 | +2433% | | **In Vitro Diagnostics** | **$6,469** | **$7,326** | **-12%** | | **Total Revenue** | **$52,483** | **$24,854** | **+111%** | - The increase in Medical Device license fees was driven by the recognition of **$24.6 million** from the $27.0 million milestone payment from Abbott upon FDA premarket approval of the SurVeil DCB[85](index=85&type=chunk) - R&D expense **declined 13%** in Q3 2023, reflecting a spending reduction plan initiated in Q2 2023 to prioritize near-term growth opportunities[89](index=89&type=chunk) - Product gross margin decreased from 63.1% to **55.8%** in Q3 year-over-year, primarily due to an adverse product mix from increased sales of lower-margin medical devices[88](index=88&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved significantly with cash reaching $44.6 million due to new debt and a milestone payment - Cash and cash equivalents increased by **$25.6 million** since September 30, 2022, reaching **$44.6 million**[104](index=104&type=chunk) - Key liquidity events included drawing **$30 million** from the new MidCap credit facility and receiving a **$27 million** milestone payment from Abbott[105](index=105&type=chunk)[108](index=108&type=chunk) - The company has access to a **$25 million** revolving credit facility and up to an additional **$75 million** in term loans under the MidCap agreement, subject to conditions[105](index=105&type=chunk)[110](index=110&type=chunk) [Customer Concentrations](index=30&type=section&id=Customer%20Concentrations) Significant revenue concentration exists with Abbott and Medtronic, accounting for 32% and 10% respectively Customer Revenue Concentration (Nine Months Ended June 30, 2023) | Customer | % of Consolidated Revenue | | :--- | :--- | | Abbott | 32% | | Medtronic | 10% | - Revenue from the SurVeil DCB license agreement with Abbott alone represented **27% of total revenue** for the nine-month period[112](index=112&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rates, which are partially hedged, and foreign currency exposure - The company entered into a five-year interest rate swap to fix the interest rate on its $25.0 million term loan at **10.205% per annum**[118](index=118&type=chunk) - The company is exposed to Euro currency risk from its manufacturing operations in Ireland, as revenue and expenses denominated in Euros are translated back to U.S. dollars[120](index=120&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[121](index=121&type=chunk) - **No changes occurred** during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[122](index=122&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various routine legal actions related to its business operations - The company is periodically involved in various legal actions, including intellectual property and employment disputes[124](index=124&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Refers to risk factors previously disclosed in the company's Annual and Quarterly Reports - No new risk factors are disclosed; the report **references risks detailed in prior SEC filings**[125](index=125&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details minor share repurchases and notes that its credit agreement restricts the buyback program - The company has **$25.3 million available** for future stock repurchases under its current authorization[128](index=128&type=chunk) - The ability to repurchase common stock is **restricted by the terms of the MidCap credit agreement**[128](index=128&type=chunk) [Other Items and Exhibits](index=32&type=section&id=Item%203%2C%204%2C%205%2C%206) Confirms no defaults or other material information to report and lists filed exhibits - Item 3: No defaults upon senior securities[129](index=129&type=chunk) - Item 4: Mine Safety Disclosures are not applicable[130](index=130&type=chunk) - Item 5: No other information to report[131](index=131&type=chunk)

Surmodics, Inc (NASDAQ:SRDX) Q2 2023 Results Conference Call April 26, 2022 8:00 AM ET Company Participants Gary Maharaj - President and Chief Executive Officer Timothy Arens - Chief Financial Officer Conference Call Participants Brooks O’Neil - Lake Street Capital Markets Michael Petusky - Barrington Research James Sidoti - Sidoti & Company Operator Welcome everyone to Surmodics’ Second Quarter and Fiscal Year 2023 Earnings Call. Please note that this call is being webcast. The webcast is accessible throug ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-23837 Surmodics, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Ident ...

Surmodics, Inc. (NASDAQ:SRDX) Q1 2023 Earnings Conference Call February 6, 2023 5:00 PM ET Company Representatives Gary Maharaj - President, Chief Executive Officer Tim Arens - Chief Financial Officer Conference Call Participants Brooks O'Neil - Lake Street Capital Markets Mike Matson - Needham & Company James Sidoti - Sidoti & Company Mike Petusky - Barrington Research Operator Welcome everyone to Surmodics' First Quarter of Fiscal Year 2023 Earnings Call. Please note that this call is being webcast. The w ...