EXTON, Pa., May 3, 2012 /PRNewswire/ -- Kensey Nash
Corporation (NASDAQ: KNSY), a medical device company primarily
focused on regenerative medicine for a wide range of medical
procedures, today reported the results for its third fiscal quarter
ended March 31, 2012.
As reported in a separate press release issued today, the
Company has entered into a definitive agreement with
Royal DSM ("DSM") (NYSE Euronext: DSM KON), pursuant to which
the Company would be acquired through a cash tender offer, followed
by a merger with a subsidiary of DSM, for a price of $38.50 per share in cash, subject to the terms
and conditions of the agreement.
Third Quarter Snapshot and Recent Developments
- Revenue of $22.2 million,
exceeding previous guidance of $21.7 -$22.1
million, a 19% increase from the prior year comparable
quarter's revenue of $18.6
million.
- Net sales of $16.1 million, in
line with previous guidance of $16.1 -$16.3
million, a 33% increase from the prior year comparable
quarter's net sales of $12.1
million.
- Royalty income of $6.1 million,
exceeding previous guidance of $5.7 -$5.9
million, 6% below the prior year comparable quarter's
royalty income of $6.5 million.
- Diluted earnings per share of $0.34 in line with previous guidance of
$0.33 - $0.35, an increase from prior
year diluted loss per share of $0.94
and a 21% decrease from prior year adjusted diluted earnings per
share* of $0.43.
- Cash from operations of $12.0
million in the quarter.
- EBITDA* of $6.6 million in the
quarter.
- On March 13, 2012, the Company
declared its second quarterly cash dividend of $0.25 per share of the Company's common
stock.
- As previously disclosed in the Company's March 16, 2012 press release, the Company entered
into a settlement agreement with St. Jude Medical which resolves
all disputes relating to the Angio-Seal vascular closure devices
licenses and agreed to extend collagen supply agreement through
2017.
President and CEO Commentary
"I am pleased to report strong third quarter results for our
company. We achieved record biomaterial sales of $15.5 million, driven primarily by sports
medicine, spine, trauma and CMF products. Our sales of sports
medicine products increased 33% and our sales of spine products
increased 29% year over year. The increase in sports medicine sales
was due to organic growth and the spine increase resulted from a
combination of organic growth from Stryker and our acquisition of
the Norian business in May 2011.
Our sales of trauma and CMF products of $2.7 million in our third quarter of fiscal 2012
increased from $100,000, also due to
our acquisition of the Norian business. Excluding the Norian
products and cardiology products, our organic sales growth in the
quarter was 10% year over year. In addition, royalty income
from our regenerative medicine products, excluding Angio-Seal, was
$2.0 million, an increase of 25% from
the prior year quarter, reflecting the end-user sales growth of
Stryker's orthobiosurgery products and Synthes' ECM general surgery
products," commented Joe Kaufmann,
President and CEO.
Supplemental Sales Data. Details of the Company's
net sales for the three and nine months ended March 31, 2012 and 2011 are summarized
below.
|
Three
Months Ended March 31,
|
Year
over
Year %
Change
|
Nine
Months Ended March 31,
|
Year
over
Year %
Change
|
|
($
millions)
|
2012
|
2011
|
|
2012
|
2011
|
|
Core Regenerative Medicine Products
|
|
|
|
|
|
|
Orthopaedic Products
|
|
|
|
|
|
|
Sports Medicine
Products
|
$4.8
|
$3.6
|
33%
|
$11.6
|
$8.9
|
30%
|
Spine
Products
|
4.1
|
3.2
|
29%
|
14.5
|
7.7
|
88%
|
Trauma &
Craniomaxillofacial Products
|
2.7
|
0.1
|
n/c
|
10.1
|
0.4
|
n/c
|
Total Orthopaedic Products
|
$11.6
|
$6.9
|
68%
|
$36.2
|
$17.0
|
113%
|
General Surgery Products
|
0.8
|
1.1
|
(28%)
|
1.9
|
3.1
|
(40%)
|
Other Regenerative Products
|
0.7
|
0.6
|
23%
|
1.5
|
1.2
|
24%
|
Total
Core Regen. Medicine Products
|
$13.2
|
$8.6
|
53%
|
$39.6
|
$21.3
|
86%
|
Cardiovascular Products
|
2.3
|
3.3
|
(29%)
|
2.6
|
11.7
|
(78%)
|
Total
Biomaterials Products
|
$15.5
|
$11.9
|
30%
|
$42.2
|
$33.0
|
28%
|
Endovascular
|
0.6
|
0.2
|
162%
|
5.9
|
0.9
|
526%
|
Total Net Sales
|
$16.1
|
$12.1
|
33%
|
$48.1
|
$33.9
|
42%
|
Third Quarter Ended March 31,
2012 (Third Quarter Fiscal 2012) Results
Revenues: Sales and Royalties. Total revenues for
the third quarter of $22.2 million
increased 19% from $18.6 million in
the prior year third quarter.
Net sales for the quarter of $16.1
million increased 33% from $12.1
million in the prior fiscal year.
Orthopaedic sales of $11.6 million
increased 68% from $6.9 million in
the prior fiscal year quarter. Excluding sales attributable
to the Company's May 2011 Norian
asset acquisition, orthopaedic sales of $8.0
million increased 16% from the prior fiscal year comparable
quarter. Sports medicine product sales of $4.8 million increased 33% from $3.6 million in the prior fiscal year quarter.
This increase from the prior year third quarter sales was
primarily due to recent approvals for the Company's largest sports
medicine customer's products in markets outside the United States. Spine product sales
of $4.1 million increased 29% from
$3.2 million in the prior fiscal year
quarter primarily due to $1.0 million
in product sales resulting from the Company's Norian asset
acquisition which consummated in May
2011. Sales of trauma and craniomaxillofacial (CMF)
products increased to $2.7 million in
the quarter from $0.1 million in the
prior fiscal year quarter, consisting almost entirely of
$2.6 million in sales resulting from
the Norian asset acquisition.
General surgery sales of $0.8
million decreased 28% from $1.1
million in the prior fiscal year. Sales of ECM
products were $0.6 million in the
third quarter of fiscal 2012, a decrease from $0.8 million in the prior year quarter due to the
impact of product launch inventory stocking orders in the prior
fiscal year.
Cardiovascular sales of $2.3
million decreased 29% from $3.3
million in the prior fiscal year. As expected, the
year over year decrease in cardiology product sales reflects the
previously disclosed timing and volume of orders placed by St. Jude
Medical (NYSE: STJ). During the quarter, as part of the
settlement agreement with St. Jude Medical, the Companies agreed to
extend the term of the collagen supply agreement through 2017 and
expand the minimums to be provided over the contract term to five
million units.
Endovascular sales of $0.6 million
increased from $0.2 million in the
prior fiscal year period due to recognition of deferred revenue
associated with the cumulative sales milestone achieved in the
second quarter of fiscal 2012.
Royalty income of $6.1 million
decreased 6% from $6.5 million in the
prior fiscal year quarter. Royalty income in the third quarter
included $4.1 million in Angio-Seal™
royalties and $1.7 million in
royalties from Stryker Corporation (NYSE: SYK), following Stryker's
June 2011 acquisition of Orthovita,
the Company's strategic partner. Stryker has a significantly
larger sales force and broader distribution channels than did
Orthovita on a standalone basis. Angio-Seal™ royalties
decreased $0.8 million, or 16%, in
the third quarter of fiscal 2012 compared to the prior fiscal year
quarter due to the impact of the settlement agreement with St. Jude
Medical and related matters. Royalties from Stryker increased
20% from the prior year comparable quarter.
Earnings Per Share. Third quarter fiscal 2012
diluted earnings per share were $0.34
compared to adjusted diluted earnings per share* of $0.43 for the same quarter of fiscal 2011 (which
excludes an acquired in-process research and development
(IPR&D) pre-tax charge of $18.2
million related to the January
2011 acquisition of assets from Nerites). During the
quarter ended March 31, 2012, the
Company incurred approximately $250,000 in legal costs associated with the
settlement discussions with St. Jude Medical. As reported
diluted loss per share in the third quarter of fiscal 2011 was
$0.94.
Nine Months Ended March 31,
2012 Results
Revenues: Sales and Royalties. Total revenues for
the nine months ended March 31, 2012
of $65.2 million increased 23% from
$52.9 million in the prior year
comparable period.
Net sales for the nine months ended March
31, 2012 of $48.1 million
increased 42% from $33.9 million in
the prior fiscal year.
Orthopaedic sales for the nine months ended March 31, 2012 of $36.2
million increased 113% from $17.0
million in the prior fiscal year comparable period.
Excluding sales attributable to the Company's May 2011 Norian asset acquisition, orthopaedic
sales of $23.4 million increased 38%
from the prior year comparable period. Both sports medicine
and spine product sales in the prior year nine-month period were
negatively impacted by an overall weakness in the markets and
reductions in inventory levels by two of the Company's major
customers. Sports medicine product sales of $11.6 million increased 30% from $8.9 million in the prior year comparable period
primarily due to a recovery from the effect of reductions in
customer inventory levels in the prior year and recent approvals by
our largest sports medicine customers' products in markets outside
the United States. Spine product sales of $14.5 million, including $3.0 million in product sales resulting from the
Company's Norian asset acquisition, increased 88% from $7.7 million in the prior fiscal year comparable
period. The increase in spine product sales was primarily due
to the impact of Stryker's acquisition of Orthovita. In
addition, the first nine months of fiscal 2012 spine product sales
reflect a recovery from the effect of reductions in customer
inventory levels in the prior fiscal year. Sales of trauma
and CMF products increased to $10.1
million in the nine month period from $0.4 million in the prior year comparable period,
consisting almost entirely of $9.8
million in sales resulting from the Norian asset
acquisition.
General surgery sales of $1.9
million for the nine months ended March 31, 2012 decreased 40% from $3.1 million in the prior fiscal year.
Sales of ECM products were $1.0
million in the first nine months of fiscal 2012, compared to
$2.4 million in the prior year
comparable period due to the impact of product launch inventory
stocking orders in the prior fiscal year.
As expected and previously disclosed, cardiovascular sales of
$2.6 million for the nine months
ended March 31, 2012 decreased 78%
from $11.7 million in the prior
fiscal year comparable period as a result of timing and volume of
orders under the Company's supply agreement with St. Jude
Medical. Under that supply agreement, the Company
received orders for $4.0 million of
collagen products to be shipped in the third and fourth quarters of
fiscal 2012; however, there were no shipments to St. Jude Medical
during the first or second quarters of fiscal 2012.
Endovascular sales of $5.9 million
for the nine months ended March 31,
2012 increased from $0.9
million in the prior fiscal year period primarily due to the
achievement of a $6.0 million
milestone from SPNC in the second quarter of fiscal 2012.
During the period, the Company recognized $5.4 million of the $6.0
million milestone, and the remainder will be recognized over
the expected period of performance.
Royalty income of $17.1 million
during the nine months ended March 31,
2012 decreased 10% from $19.0
million in the prior year comparable period. Royalty income
in the period included $12.1 million
in Angio-Seal™ royalties and $4.5
million in royalties from Stryker. Angio-Seal™
royalties decreased $2.3 million, or
16%, in the nine months ended March 31,
2012 compared to the prior fiscal year period, primarily due
to the impact of the settlement agreement with St. Jude Medical and
related matters. Royalties from Stryker related to the Vitoss
Foam and Bioactive products of $4.5
million increased 16% from the prior fiscal year comparable
period. This increase was offset by a $0.4 million decrease in the royalty from a
license based upon the Vitoss technology, which expired in
July 2011.
Earnings Per Share. Adjusted diluted earnings per
share* for the nine months ended March 31,
2012 were $1.16 (which
excludes pre-tax non-cash expense to cost of goods sold of
$1.0 million from Norian inventory
step-up) compared to adjusted diluted earnings per share* of
$1.22 (which excludes the acquired
IPR&D charge described above) for the same period of fiscal
2011. As reported diluted earnings per share for the nine
months ended March 31, 2012 were
$1.09 and as reported diluted loss
per share for the nine months ended March
31, 2011 was $0.10.
Negatively affecting the Company's nine months ended March 31, 2012 adjusted diluted* and diluted
earnings per share were reduced royalties from St. Jude Medical of
approximately $2.3 million, or
$0.17 per share. Additionally,
during the nine months ended March 31,
2012, the Company incurred approximately $600,000 in legal costs associated with the
settlement discussions with St. Jude Medical.
During the nine months ended March 31,
2012, the Company generated cash from operations of
$26.0 million and, at March 31, 2012, had a $39.4 million cash and investment
balance.
Income Taxes. The Company currently estimates that
its fiscal 2012 effective tax rate will be approximately 33%.
In the course of estimating the Company's annual effective tax rate
and recording its quarterly income tax provision, the Company
considers many factors, including its expected earnings, state
income tax apportionment, estimated manufacturing and research and
development tax credits, non-taxable interest income and other
estimates. Material changes in, or differences from, these
estimates could have a significant impact on the Company's
effective tax rate.
Declared Cash Dividend. On March
13, 2012, the Company's board of directors announced that
the board had declared a cash dividend of $0.25 per share of the Company's common stock,
payable to stockholders of record on April
30, 2012. The dividend will be paid on May 31, 2012, and that total dividend is expected
to approximate $2.2 million.
*EBITDA and adjusted diluted earnings per share are non-GAAP
financial measures and should not be considered replacements for
GAAP results or guidance. For a reconciliation of these
non-GAAP financial measures to the most directly comparable GAAP
financial measures, see the accompanying table to this
release.
Conference Call and Webcast. The previously
scheduled conference call for today at 9:00
a.m. Eastern Time to discuss our third quarter operating
results has been cancelled. There will instead be a conference call
today at 8:00 a.m. Eastern Time to
discuss the proposed transaction with DSM. To participate in
the teleconference call, please dial 612-332-0634.
Individuals interested in listening to the teleconference may also
do so over the Internet at www.kenseynash.com. To do so,
please go to www.kenseynash.com and choose Conferences and Webcasts
on the Investor Relations page. Please allow 15 minutes prior
to the start of the call to register and download and/or install
any necessary software.
About Kensey Nash Corporation. Kensey Nash
Corporation is a medical device company primarily focused on
regenerative medicine utilizing its proprietary collagen and
synthetic polymer technology. The Company is recognized as a
leader for innovative product development and unique technology in
the field of resorbable biomaterials. The Company has an
extensive range of products, which are sold through strategic
partners in multiple medical markets, including the cardiology,
orthopaedic, sports medicine, spine, trauma, craniomaxillofacial
and general surgery markets.
Cautionary Note for Forward-Looking Statements.
This press release contains forward-looking statements, including
statements regarding the current expectations of Kensey Nash
Corporation (the "Company") about its prospects and opportunities.
The forward-looking statements are covered by the "Safe Harbor for
Forward-Looking Statements" provided by the Private Securities
Litigation Reform Act of 1995. The Company has tried to
identify these forward looking statements by using words such as
"expect," "anticipate," "estimate," "plan," "will," "would,"
"should," "forecast," "believe," "guidance," "projection" or
similar expressions, but these words are not the exclusive means
for identifying such statements. The Company cautions that a
number of risks, uncertainties and other important factors could
cause the Company's actual results to differ materially from those
expressed in, or implied by, the forward-looking statements,
including, without limitation, St. Jude Medical's success in
selling the Angio-Seal device and the extent to which St. Jude
Medical is able to and does in fact rely on its internal
manufacturing to fulfill its requirements for collagen plugs for
the Angio-Seal device in excess of the contractual minimums under
the Company's extended collagen supply agreement with St. Jude
Medical, the success of the Company's other customers and partners
(including Arthrex, Stryker and Synthes) in selling Kensey Nash related products in the marketplace,
the Company's success in its research and development efforts
(including in its extracellular matrix, cartilage repair, and
adhesive materials programs), the Company's success in and the
uncertainty of transitioning the Norian manufacturing operations to
the Company and Synthes' success in distributing the Norian
products, the success of clinical trials in both the U.S. and
outside the U.S. to support regulatory approval of the Company's
products, and competition from other technologies, as well as tax
and other risks associated with healthcare reform, economic
conditions and foreign currency fluctuations. For a detailed
discussion of factors that could affect the Company's future
operating results, please see the Company's SEC filings, including
the disclosures under "Risk Factors" in those filings. See
also the press release the Company issued today regarding the
proposed transaction with DSM for risks, uncertainties and other
factors relating to this transaction. Except as expressly required
by the federal securities laws, the Company undertakes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, changed circumstances or
future events or for any other reason.
– FINANCIAL INFORMATION TO FOLLOW
–
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|
KENSEY
NASH CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
|
|
(in
thousands, except share and per share data)
|
|
(Unaudited)
|
|
|
|
Three
Months
|
|
Nine
Months
|
|
|
|
|
Ended
March 31
|
|
Ended
March 31
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
16,063
|
|
$
12,120
|
|
$
48,073
|
|
$
33,900
|
|
|
Royalty income
|
|
6,096
|
|
6,472
|
|
17,097
|
|
19,012
|
|
|
Total revenues
|
|
22,159
|
|
18,592
|
|
65,170
|
|
52,912
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold
|
|
7,867
|
|
5,707
|
|
23,930
|
|
16,267
|
|
|
Research and development
|
|
6,258
|
|
4,531
|
|
17,030
|
|
12,778
|
|
|
Selling, general and administrative
|
|
3,332
|
|
2,223
|
|
8,850
|
|
6,587
|
|
|
Acquired in-process research and development
|
|
-
|
|
18,233
|
|
-
|
|
18,233
|
|
|
Total operating costs and expenses
|
|
17,457
|
|
30,694
|
|
49,810
|
|
53,865
|
|
|
Income/(Loss) from operations
|
|
4,702
|
|
(12,102)
|
|
15,360
|
|
(953)
|
|
|
Other
expense, net
|
|
(380)
|
|
(418)
|
|
(1,230)
|
|
(1,066)
|
|
|
Pre-tax
income/(loss)
|
|
4,322
|
|
(12,520)
|
|
14,130
|
|
(2,019)
|
|
|
Income tax
expense/(benefit)
|
|
1,369
|
|
(4,471)
|
|
4,617
|
|
(1,148)
|
|
|
Net
income/(loss)
|
|
$
2,953
|
|
$
(8,049)
|
|
$
9,513
|
|
$
(871)
|
|
|
Basic
earnings/(loss) per share
|
|
$
0.34
|
|
$
(0.94)
|
|
$
1.10
|
|
$
(0.10)
|
|
|
Diluted
earnings/(loss) per share
|
|
$
0.34
|
|
$
(0.94)
|
|
$
1.09
|
|
$
(0.10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
8,675,958
|
|
8,525,786
|
|
8,651,082
|
|
8,692,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average common shares outstanding
|
|
8,751,937
|
|
8,525,786
|
|
8,747,491
|
|
8,692,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
(in
thousands)
|
|
(Unaudited)
|
|
|
|
March
31,
|
|
June
30,
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
24,560
|
|
$
10,219
|
|
|
|
|
|
|
Investments
|
|
14,817
|
|
11,722
|
|
|
|
|
|
|
Trade
receivables
|
|
5,255
|
|
5,804
|
|
|
|
|
|
|
Other
receivables
|
|
5,553
|
|
6,727
|
|
|
|
|
|
|
Inventory
|
|
15,148
|
|
16,629
|
|
|
|
|
|
|
Deferred tax asset,
current
|
|
2,935
|
|
1,564
|
|
|
|
|
|
|
Prepaid expenses and
other assets
|
|
1,889
|
|
2,807
|
|
|
|
|
|
|
Total current assets
|
|
70,157
|
|
55,472
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
56,957
|
|
57,949
|
|
|
|
|
|
|
Deferred
tax asset, non-current
|
|
8,872
|
|
8,372
|
|
|
|
|
|
|
Other
non-current assets
|
|
25,908
|
|
25,127
|
|
|
|
|
|
|
Total
assets
|
|
$
161,894
|
|
$
146,920
|
|
|
|
|
|
|
|
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|
|
Liabilities and Stockholders' Equity
|
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|
Current
liabilities:
|
|
|
|
|
|
|
|
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|
|
Accounts payable and
accrued expenses
|
|
$
8,105
|
|
$
4,705
|
|
|
|
|
|
|
Other current
liabilities
|
|
2,971
|
|
5
|
|
|
|
|
|
|
Current portion of
debt
|
|
1,400
|
|
1,400
|
|
|
|
|
|
|
Deferred
revenue
|
|
3,304
|
|
947
|
|
|
|
|
|
|
Short-term deferred
acquisition payments
|
|
15,500
|
|
1,500
|
|
|
|
|
|
|
Total current liabilities
|
|
31,280
|
|
8,557
|
|
|
|
|
|
|
Long-term
portion of debt
|
|
27,533
|
|
28,583
|
|
|
|
|
|
|
Deferred
revenue, non-current
|
|
2,065
|
|
2,466
|
|
|
|
|
|
|
Long-term
deferred acquisition payments
|
|
-
|
|
15,500
|
|
|
|
|
|
|
Other
non-current liabilities
|
|
5,142
|
|
4,977
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
95,874
|
|
86,837
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
161,894
|
|
$
146,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures and
Reconciliations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As used
herein, "GAAP" refers to generally accepted accounting principles
in the United States. We use
various numerical measures in conference calls, investor meetings
and other forums which are or may be considered "Non-GAAP financial
measures" under Regulation G. We have provided below for your
reference supplemental financial disclosure for these measures,
including the most directly comparable GAAP measures and associated
reconciliations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months Ended March 31, 2012 Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31, 2012
|
|
|
|
|
|
|
|
|
|
($
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
- GAAP
|
|
|
$
2.9
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
(0.1)
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
1.9
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
$
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter Fiscal 2012 and Prior Year Comparable Third Quarter Fiscal
2011 Adjusted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
March
31, 2012
|
|
March
31, 2011
|
|
March
31, 2012
|
|
March
31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(Loss) Per Share - GAAP
|
|
|
$
0.34
|
|
$
(0.94)
|
|
$
1.09
|
|
$
(0.10)
|
|
|
Inventory
Step-up Amortization expense(a)
|
|
|
-
|
|
-
|
|
0.08
|
|
-
|
|
|
Acquired
In-Process Research & Development (b)
|
|
|
-
|
|
1.39
|
|
-
|
|
1.36
|
|
|
Adjusted
Diluted Earnings Per Share
|
|
|
$
0.34
|
|
$
0.43
|
|
$
1.16
|
|
$
1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
(a)
Diluted earnings per share for the nine months ended March 31, 2012
includes acquired inventory step-up non-cash expense of
approximately $1,030,000 ($670,000 net of tax), or $0.08 diluted
per share tax-effected, recorded during the first and second
quarters of fiscal 2012 in connection with the Norian asset
acquisition. This represents the purchase accounting adjustment
related to assigning a fair value to the acquired inventory at the
date of acquisition to adjust inventory for the estimated
capitalized manufacturing profit in the acquired
inventory. This non-cash
charge to cost of products sold was recorded over the expected
inventory turn-over period, as the capitalized manufacturing profit
added to inventory under purchase accounting was sold within
approximately five months of the date of acquisition.
|
|
(b)
Diluted Loss Per Share for the third quarter of fiscal 2011
included acquired in-process research and development (IPR&D)
pre-tax charges of approximately $18.2 million ($11.8 million net
of tax), or $1.39 and $1.36 diluted per share tax-effected for the
three and nine months ended March 31, 2011, respectively. This
acquired IPR&D charge was incurred in connection with the
acquisition of the net assets of Nerites Corporation, a developer
of medical adhesives and anti-fouling coatings during the third
quarter of fiscal 2011.
Column totals for Adjusted Diluted Earnings Per Share do not sum
due to the effect of basic weighted average shares used in the GAAP
Loss Per Share calculation and the effect of diluted weighted
average shares used in the Adjusted Diluted Earnings Per Share
calculation for the three and nine months ended March 31,
2011.
|
|
Note: To
supplement its consolidated financial statements presented in
accordance with GAAP, Kensey Nash Corporation provides and uses
non-GAAP measures, such as EBITDA and Adjusted Diluted Earnings Per
Share, because Kensey Nash management believes that in order to
properly understand the Company's short-term and long-term
financial trends, investors may wish to consider the impact of
certain adjustments (such as in-process research and development
charges, acquisition related charges including inventory step-up
and related income tax adjustments). These adjustments result from
facts and circumstances (such as business development activities
and acquisitions) that vary in frequency and impact on the
Company's results of operations. Kensey Nash management uses these
non-GAAP measures to forecast and evaluate the operational
performance of the Company and for planning purposes, as well as to
compare results of current periods to prior periods on a
consolidated basis. EBITDA represents the Company's GAAP net income
adjusted to exclude interest, taxes, depreciation and amortization.
Adjusted Diluted Earnings Per Share is adjusted from GAAP results
to exclude certain expenses described above. These non-GAAP measures are provided to
enhance the user's overall understanding of the Company's
historical and current financial performance. The Company believes the non-GAAP
results provide useful information to both management and investors
by excluding certain non-operating items, non-cash expenses and
expenses that the Company believes are not indicative of its core
operating results or future performance.
|
|
These
non-GAAP measures provide investors and management with an
alternative method for assessing Kensey Nash's operating results.
Further, these non-GAAP measures are among several primary
indicators management uses for planning and
forecasting. Non-GAAP
financial measures used by the Company may be calculated
differently from, and therefore may not be comparable to, similarly
titled measures used by other companies. Investors should consider
non-GAAP measures in addition to, and not as a substitute for, or
as superior to, financial performance measures prepared in
accordance with GAAP.
|
SOURCE Kensey Nash Corporation