Surmodics(SRDX)2025-01-30 12:55Revenue Performance - Surmodics reported total revenue of 0.6 million or 2% compared to the prior-year quarter[96]. - Medical Device segment revenue was 23.5 million in the prior-year quarter[96]. - Product sales in the Medical Device segment decreased by 15% to 2.3 million, or 12%, to 18.8 million in Q1 fiscal 2024[100]. - IVD product sales decreased by 6% to 1.3 million in the first quarter of fiscal 2025, compared 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 8.9 million, representing 30% of total revenue in Q1 fiscal 2025[104]. - SG&A expenses rose by 21%, or 15.2 million, accounting for 51% of total revenue in Q1 fiscal 2025[105]. - Product gross profit fell by 9.1 million, with product gross margins increasing to 55.1% from 53.2% year-over-year[102]. - Total segment operating income increased by 3.1 million, with the Medical Device segment reporting an operating income of (7.9) million in Q1 fiscal 2025, an improvement from 2.1 million to 30.1 million, with expectations for sufficient liquidity to meet cash needs and fund operations in fiscal 2025[119]. - The company generated 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 25 million, with an outstanding balance of 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].