November 20, 2014 FY2015 Q2 Review. Safe Harbor Statement 2 This presentation includes...
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Transcript of November 20, 2014 FY2015 Q2 Review. Safe Harbor Statement 2 This presentation includes...
November 20, 2014
FY2015 Q2 Review
Safe Harbor Statement
2
This presentation includes forward looking statements.‐Forward looking statements may be identified by the use of forward looking terminology, including “may,” ‐ ‐“believe,” “will,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” and “forecast,” or other similar words.Statements in this presentation are based on information presently available to us and assumptions that we believe to be reasonable.Investors are cautioned that all such statements involve risks and uncertainties.Forward looking statements in this presentation include statements concerning:‐• Building stockholder value;• Achieving consistent sales and profitability targets and growth worldwide;• Achieving clinical, regulatory, product development and market development projects and goals; • Evaluating and advancing other medical device and neuroscience opportunities;• Completing the stock repurchase program; and• Fiscal guidance for fiscal year 2015
Our actual results may differ materially.For a detailed discussion of the factors that may cause our actual results to differ, please refer to our most recent filings with the SEC, including our Annual Report on Form 10 K for the fiscal year ended April 25, ‐2014 and Quarterly Report on Form 10-Q for the fiscal period ended July 25, 2014.
TOPICS
Highlights
FY15 Q2 OverviewSalesFinancials
Strategic Focus Update
FY15 Guidance
3
Quarterly Highlights and Performance
4
* The company refers and makes comparisons to non-GAAP financial measures in this presentation: EBITDA, adjusted net income and adjusted income per diluted share. Investors should consider non-GAAP measures in addition to, and not as a substitute for or superior to, financial performance measures prepared in accordance with GAAP. Please refer to the reconciliation between GAAP and non-GAAP measures for EBITDA, adjusted net income and adjusted Income per diluted share included in our earnings release dated November 20, 2014.
• Continued growth and leverage
Net Product Sales $73 million 5%
U.S. $60 million 4%
International $13 million 10%
Operating Income $26 million 20%
EBITDA $30 million 18%
Adjusted Income per diluted share $0.63 26% *
• Regulatory approval of ProGuardianREST™ System in Europe• Vitaria™ generator submission completed for CE mark (chronic heart failure)
• AspireSR ™ generator regulatory submission to FDA
Sales
5
FY15 Q2 Net Sales
6
• Solid international growth
*On a constant currency basis, international sales revenue grew by 13%
- Numbers in $000s- Represents revenue from sales of generators, leads, and other related devices
*
% Change
U.S. 56,358 57,882 53,020 58,194 58,838 59,939 3.6%International 11,047 12,219 13,071 14,009 13,166 13,479 10.3%
$67,404 $70,101 $66,091 $72,203 $72,004 $73,417 4.7%
Single Country Order 2,100 2,646
Net Product Sales $67,404 $70,101 $68,191 $74,849 $72,004 $73,417 4.7%
Licensing Total 1,468
Net Sales Total $68,872 $70,101 $68,191 $74,849 $72,004 $73,417 4.7%
FY 2015
Q1 Q2 Q3 Q4
FY 2014
Q2 FY15 vs. Q2 FY14
Q1 Q2
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
Q1 Q2 Q3 Q4
Net
Pro
duct
Sal
es($
mill
ion)
Continued Worldwide Net Product Sales Growth
7
- Represents revenue from sales of generators, leads, and other related devices
$73.4M
• Year-over-year sales increases
FY15 Q2 Unit Sales
8
• Strong international growth
% Change
U.S. 2,455 2,518 2,259 2,482 2,500 2,525 0.3%International 899 978 1,050 1,115 1,024 1,081 10.5%
3,354 3,496 3,309 3,597 3,524 3,606 3.2%
Single Country Order 100 126
Unit Sales Total 3,354 3,496 3,409 3,723 3,524 3,606 3.2%
Q2Q1
FY 2014 FY 2015Q2 FY15 vs.
Q2 FY14Q2 Q3 Q4 Q1
Q1 Q2 Q3 Q4
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
FY10FY11
FY12FY13
FY14FY15
U.S
. Uni
t Sal
es o
f Gen
erat
ors
U.S. Unit Sales Growth
9
2,525
Q1 Q2 Q3 Q4
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
FY10FY11
FY12FY13
FY14FY15
ASP
of U
.S. G
ener
ator
s
Consistent U.S. ASP Growth for Generators
10
$20,550
• Increase of 4% over Q2 prior year
Financials
11
FY15 Q2 Financial Results*
12
- All numbers in $000s except for income per share
* Please refer to the reconciliation between GAAP and non-GAAP measures for EBITDA, adjusted net income and adjusted income per diluted share included in our earnings release dated November 20, 2014.
Q2 FY15 Q2 FY14
Net Sales $73,417 $70,101 4.7 %
Gross Profit 66,651 63,175 5.5 %Gross Profit % 90.8% 90.1%
SG&A 29,573 29,634 (0.2)%R&D 10,817 11,653 (7.2)%
Total Operating Expenses 40,390 41,287 (2.2)%
Income From Operations $26,262 $21,888 20.0 %
Income tax expense 9,025 8,004 12.8 %
Net Income $17,273 $13,888 24.4 %
Outstanding shares - diluted 26,792 27,579 (2.9)%
Diluted income per share $0.64 $0.50 28.0 %
% Change
Reconciliation of Non-GAAP Financial Measures
13
- All numbers in $000s except for income per share
Q2 FY15 Q2 FY14
Net income $17,273 $13,888 24.4%Change in reserve for prior year R&D tax credits (1,301) R&D tax credit not enacted 223 Reserve for prior year international tax liabilities 744
Adjusted non-GAAP net income $16,939 $13,888 22.0%
Diluted income per share $0.64 $0.50 28.0%Change in reserve for prior year R&D tax credits (0.05) R&D tax credit not enacted 0.01 Reserve for prior year international tax liabilities 0.03
Adjusted non-GAAP diluted income per share $0.63 $0.50 26.0%
% change
Financial and Business Highlights
Sales • Double digit international revenue and unit growth• New highs for U.S. units and revenue• Ongoing ASP growth
Financial leverage • Adjusted net income increase of 22%• Adjusted EPS growth of 26%
Industry-leading margins
• Gross margin of 91%• Operating margin of 36%• Adjusted EBITDA margin of 41%
Strong balance sheet and cash flow
• $142m in cash and short term investments• Stockholders equity of $270M• Adjusted LTM EBITDA of $111M
14
Strategic Focus
15
Product Development Program
AspireSR® Generator • Continued adoption in Europe & Middle East• Submitted to FDA for approval
ProGuardianRESTTM
System• Received EU regulatory clearance• Limited commercial release planned
CentroTM Generator • Utilizes wireless communication technology• Regulatory submissions expected in FY2015
Autonomic Regulation Therapy for chronic heart failure
• Results presented on September 1st
• VITARIATM submission completed• First patient implanted in HFpEF study
16
FY15 Goals Update
17
Build shareholder value through:
Continued leadership in epilepsy medical devices
Consistent sales and profitability growth worldwide
Achieving clinical and product development milestones
ProGuardianREST™ regulatory submissionsCentro™ regulatory submissionsAspireSR® generator U.S. regulatory progress
Evaluating and advancing other neuroscience opportunitiesCHF regulatory submission in Europe
FY15 Guidance
18
Fiscal FY2015 Guidance – Net Sales Updated
19
Net Sales
$96 million - $99 million
$292 million - $298 million 7%
Adjusted Income from Operations
$62 million - $64 millionAdjusted Net Income
$2.33 - $2.39Adjusted EPS
11%
12%
16%
% change FY14 Adjusted
vs FY15 Midpoint
*FY14 net sales adjusted for Single Country Order and Licensing Revenue
*
(Previous net sales guidance: $300 million - $307 million)
20
For additional information, please contact:
Investor [email protected]
www.cyberonics.comNASDAQ:CYBX