Cardiovascular Systems (CSII) Missed Q1 Results, Leading Revenues – November 11, 2022

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Cardiovascular Systems, Inc. (CSII Free Report) reported a loss of 27 cents per share for the first quarter of fiscal 2023, higher than a loss of 22 cents in the year-ago period. The reported loss was also larger than Zacks’ consensus estimate of a loss of 24 cents.

Net sales

Cardiovascular Systems revenue of $59.7 million increased 2.2% year over year. The upper line also exceeded the Zacks consensus estimate by 0.6%. The company recorded strong growth in its coronary activity.

Segment details

In the quarter under review, worldwide coronary revenue increased 7.9% year-over-year to $20.9 million, driven by strong assistive device growth and expansion international. The launch of the Scoreflex scoreball received a positive response and generated over $1.7 million in sales during the first quarter.

International revenues were up 40% year-over-year, with strong growth in each of the company’s key markets, including Japan, Europe, Asia-Pacific and Canada.

Global Peripheral revenue decreased 1% year-over-year in the quarter to $38.8 million. Sporadic staffing shortages continued to impact peripheral procedure volumes, particularly for lower acuity patients with intermittent quantification.

Margins

Gross margin in the reported quarter was 72%, down 347 basis points (bps) year-over-year due to a 16.7% increase in cost of goods sold.

Selling, general and administrative expenses increased by 6.3% to $44.5 million. Research and development expenses fell 9.6% to $9.1 million.

Adjusted operating expenses increased by 3.2% to $53.5 million. Adjusted operating loss in the reported quarter was $10.6 million, compared to an adjusted operating loss of $7.8 million in the same period last year.

Financial situation

The company ended the first quarter of fiscal 2023 with cash and cash equivalents of $62.9 million, compared to $66.4 million at the end of fiscal 2022.

Orientation 2022

Cardiovascular Systems management reiterated its guidance for fiscal 2023 with the assumption of continued improvement in U.S. hospital procedure volumes and no further COVID-related headwinds over the course of the year. year.

Revenue for the full year is again expected in the range of $255 million to $265 million. Zacks consensus estimate for the same is currently pegged at $258.2 million.

The company expects a net loss of around 9% to 11% of revenue. The Zacks consensus estimate for the metric is pegged to a loss of 67 cents per share.

Our opinion

Cardiovascular Systems’ loss per share in the first quarter of fiscal 2022 was larger than the year-ago figure and the consensus mark. Revenue, however, topped the prior year’s figure and topped Zacks’ consensus estimate. The launch of the Scoreflex scoreball was a strong contributor to Coronary’s sales in the quarter. However, lower procedure volumes due to hospital capacity issues and staffing shortages hurt peripheral sales growth.

Gross margin for the quarter contracted and the company incurred an operating loss due to increased costs and expenses.

Zacks Ranking and Key Picks

Cardiovascular Systems currently carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader medical field that have announced quarterly results are AMN Healthcare Services, Inc. (AMN free report), Medpace Holdings, Inc. (MEDP free report) and Merit Medical Systems, Inc. (MMSI free report).

AMN Healthcare, carrying a Zacks rank of No. 2 (buy), reported adjusted EPS of $2.57 in the third quarter of 2022, which beat the Zacks consensus estimate by 10.3%. Revenue of $1.14 billion topped the consensus mark of 3.9%. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMN Healthcare has an estimated long-term growth rate of 3.3%. AMN’s earnings have exceeded estimates for the past four quarters, averaging 10.9%.

Medpace Holdings, sporting a No. 1 Zacks ranking, reported Q3 2022 EPS of $2.05, which beat the Zacks consensus estimate by 39.5%. Revenue of $383.7 million topped the consensus mark of 8.1%.

Medpace Holdings has an estimated growth rate of 44.9% for the full year of 2022. MEDP earnings have exceeded estimates for the past four quarters, averaging 22%.

Merit Medical, carrying a No. 2 Zacks rank, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks consensus estimate of 20.8%. Revenue of $287.2 million topped the consensus mark of 5.2%.

Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings have exceeded estimates for the past four quarters, averaging 25.4%.

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