ev3, Inc. (EVVV), the Zacks Bull of the Day for last Friday (October 23rd), reported third quarter 2009 earnings per share of 17 cents, easily beating the Zacks Consensus Estimate of 2 cents and the year-ago earnings of 4 cents.
Sales
Net sales in the reported quarter increased 5.4% year over year to $112.8 million. Excluding the research collaboration revenues, net sales increased 12.8% year over year. The company generated research collaboration revenues despite the termination of its agreement with Merck & Co. Inc. (MRK), which ended July 22, 2008.
On a geographic basis and excluding the research collaboration revenues, U.S. contributed approximately 61% to total sales and increased 8% year over year. International revenues increased 21% year over year.
Growth was seen in all business segments. Peripheral vascular sales increased 1% year over year to $67.6 million. Growth can be attributed to higher demand for stents, and thrombectomy and embolic protection devices. This was partly offset by lower atherectomy and procedural support revenues.
Neurovascular sales increased 37% year over year to $45.2 million. Both Embolic products, and Neuro access and delivery products registered a strong growth of 56% and 12% year over year, respectively.
ev3 registered a sharp expansion in margins. Gross margin increased 1,040 basis points (bps) year over year to 74.6% in the reported quarter. Sales, general and administrative expenses as a percentage of sales declined 80 bps year over year to 48.8%. Research and development expenses as a percentage of sales declined 20 bps year over year to 11.1%.
Higher gross margin coupled with lower operating expenses were responsible for increasing the operating margin by 1,100 bps year over year to 6.7%.
Balance Sheet
ev3 ended the quarter with cash and cash equivalents of $80.5 million, an increase of $20.1 million from the prior quarter. The company’s outstanding long-term debt stood at approximately $7.1 million at the end of the quarter.
Guidance
ev3 has provided guidance for the next quarter and full fiscal 2009. For the fourth quarter, net sales are estimated in the range of $124 to $128 million. Earnings per share should be between 20 and 24 cents. The number of outstanding shares should be roughly 112.8 million.
For the full fiscal 2009, net sales are estimated in the range of $446 to $450 million. Earnings per share should be between 58 and 62 cents. The number of outstanding shares should be approximately 109.1 million.
ev3 is a Plymouth, MN-based endovascular company that concentrates on catheter-based, or endovascular, technologies for the minimally invasive treatment of vascular diseases and disorders. The company’s acquired broad product portfolio is focused on applications in each of the three sub-markets of the endovascular device market (ev3): peripheral vascular, cardiovascular and neurovascular. ev3 competes in the endovascular market with a number of large companies like Boston Scientific Corporation (BSX), Medtronic Inc. (MDT), C.R. Bard (BCR), Cordis etc.
Read the full analyst report on “EVVV”
Read the full analyst report on “MRK”
Read the full analyst report on “BSX”
Read the full analyst report on “MDT”
Read the full analyst report on “BCR”
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