CYBERONICS INC - FORM 8-K - EX-99.1 - PRESS RELEASE DATED JUNE 2, 2011 - June 2, 2011

Attached files

file filename
8-K - FY11 Q4 EARNINGS RELEASE - CYBERONICS INCform_8-k.htm
EXHIBIT 99.1

CYBX Logo


For Release Thursday, June 2, 2011; 7:00 AM ET
 

CYBERONICS REPORTS RECORD FISCAL 2011 RESULTS AND
PROVIDES FISCAL 2012 GUIDANCE

Fiscal 2011 Net Sales of $190.5 million, a 14% increase

Income from Operations Increased by 33% over Fiscal 2010

HOUSTON, Texas June 2, 2011 -- Cyberonics, Inc. (NASDAQ:CYBX), a global leader in epilepsy management, today announced results for the fourth quarter and fiscal year ended April 29, 2011.

Annual Highlights
Operating results for the fifty-two week fiscal 2011 compared with the fifty-three week fiscal 2010, without adjustment for the extra week in fiscal 2010, include:

·  
Net sales of $190.5 million, a 14% increase from $167.8 million;
·  
U.S. net sales increased by 19%;
·  
Income from operations of $49.2 million, an increase of 33%; and
·  
Cash flow from operations of $50 million, an increase of 16%.

For fiscal 2011, net income was $46.7 million, and income per diluted share was $1.64.  Comparisons to fiscal 2010 are impacted by significant tax benefits recorded in both fiscal years.  While the effective tax rate is expected to be approximately 40% in fiscal 2012, we continue to expect that cash payments for income taxes will not exceed 3% of income before tax during fiscal years 2012 and 2013.

Quarterly Highlights
Operating results and achievements for the thirteen-week fourth quarter fiscal 2011 compared to the fourteen-week fourth quarter of fiscal 2010, without adjustment for the extra week in fiscal 2010, include:

·  
Net sales increased by 7% to a record $51.1 million;
·  
U.S. net sales increased by 13%;
·  
Income from operations increased to a record $13.0 million;
·  
Successful limited commercial launch of the new AspireHC™ generator; and
·  
First implant of the AspireSR™ generator in the E-36 clinical trial to support regulatory approval in Europe.

 
 
 
“The fourth quarter of fiscal 2011 represented another record quarter for our company in both net sales revenue and operating profitability,” commented Dan Moore, Cyberonics' President and Chief Executive Officer.  “We were particularly pleased with the robust sales growth in our U.S. epilepsy business, continuing the trends of recent quarters, driven by both higher volume and increased average selling prices.  Initial demand for the AspireHC™ generator, in limited commercial release, is encouraging.

“Fiscal 2011 provided further evidence of the underlying strength of our U.S. epilepsy business, in terms of both the number of new patients receiving the therapy and the number of current patients returning to replace their generators.  The combination of physician education programs, recently published data, and effective sales force execution resulted in another strong year.  The $160 million in fiscal 2011 revenues in our U.S. epilepsy business represents an increase of 97% from an estimated $82 million in fiscal 2007.

“Net sales in our international business remained below our expectations, although revenue of $7.1 million in the fourth quarter is consistent with the previous two quarters.  We have increased our investment in the European market and expect that growth will resume in fiscal 2012.  The tragic events in Japan have created uncertainty in that market.  We continue to monitor the situation in Japan closely, and we applaud the efforts of our partner, Nihon Kohden, during these difficult times.

“We reported operating cash flow of $50 million for fiscal 2011.  Our available cash balance at year end fiscal 2011 was $89 million, an increase of $30 million compared to the end of fiscal 2010, giving us significant financial flexibility to expand our business over time.”

Mr. Moore concluded, “This was another strong quarter and fiscal year for Cyberonics.  We continue to emphasize profitability and sustainable sales growth, along with effective market and product development, as our primary goals, so we were very gratified to see significant progress in all four areas.  Our expectations for fiscal 2012 include continued market penetration in the U.S., improved performance in our international markets, particularly Europe and Asia, a focus on clinical trial enrollments, and ongoing product development execution required to further enhance our product offering.  We are extremely proud of the accomplishments of the Cyberonics team.”

Fiscal 2012 Guidance
Cyberonics is providing net sales guidance for fiscal year 2012 in the range from $212 million to $215 million.  In addition, the company expects that income from operations for fiscal year 2012 will be in the range from $54 million to $57 million.

Additional details will be provided during today’s conference call and in an investor presentation summarizing the company’s fourth quarter and fiscal year 2011 results, which is available in the investor relations section of Cyberonics’ corporate website at http://www.cyberonics.com.

 
 
 
Fourth Quarter and Fiscal Year 2011 Results Conference Call Instructions

Cyberonics will host a conference call today, June 2, 2011, beginning at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to review its results of operations for the fourth quarter and fiscal 2011 and future outlook, followed by a question and answer session.

The conference call will be available to interested parties through a live audio webcast in the investor relations section of Cyberonics’ corporate website at http://www.cyberonics.com, where it will be archived and accessible for approximately 12 months.  To listen to the conference call live by telephone dial 877-638-4557 (if dialing from within the U.S.) or 914-495-8522 (if dialing from outside the U.S.).  The conference ID is 63121643.

A replay of the conference call will be available approximately two hours after the completion of the conference call by dialing 800-642-1687 (if dialing from within the U.S.) or 706-645-9291 (if dialing from outside the U.S.).  The replay conference ID access code is 63121643.  The replay will be available for one week on the above number.

About Cyberonics, Inc. and the VNS Therapy® System

Cyberonics, Inc. is a medical technology company with core expertise in neuromodulation.  The company developed and markets the VNS Therapy System, which is FDA-approved for the treatment of refractory epilepsy and treatment-resistant depression.  The VNS Therapy System uses a surgically implanted medical device that delivers electrical pulsed signals to the vagus nerve.  Cyberonics markets the VNS Therapy System in selected markets worldwide.

Additional information on Cyberonics and the VNS Therapy System is available at www.cyberonics.com.

 
 
 
Safe harbor statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the use of forward-looking terminology, including "may," "believe," "will," "expect," "anticipate," "estimate," "plan," "intend," "forecast," or other similar words. Statements contained in this press release are based on information presently available to us and assumptions that we believe to be reasonable. We are not assuming any duty to update this information if those facts change or if we no longer believe the assumptions to be reasonable. Investors are cautioned that all such statements involve risks and uncertainties, including without limitation, statements concerning improving our profitability and sustaining our sales growth, continued market penetration in the U.S., improved performance in our international markets, particularly Europe and Asia, enrolling our clinical studies, including E-36, executing our product development plans to enhance our product offering, expanding our business over time, and fiscal 2012 guidance, as follows: sales of $212 million to $215 million, and operating income of $54 million to $57 million. Our actual results may differ materially. Important factors that may cause actual results to differ include, but are not limited to: continued market acceptance of VNS therapy and sales of our products; satisfactory completion of post-market studies required by the U.S. Food and Drug Administration as a condition of approval for the treatment-resistant depression indication; adverse changes in coverage or reimbursement amounts by third-parties; intellectual property protection and potential patent infringement claims; potential litigation relating to compliance with laws and regulations pertaining to our business; product liability claims and potential litigation; reliance on single suppliers and manufacturers for certain components; the accuracy of management's estimates of future expenses and sales; the potential identification of material weaknesses in our internal controls over financial reporting; and other risks detailed from time to time in our filings with the Securities and Exchange Commission (SEC). For a detailed discussion of these and other cautionary statements, please refer to our most recent filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2010, and our Quarterly Reports on Form 10-Q for the fiscal quarters ended July 30, 2010, October 29, 2010 and January 28, 2011.
 
Contact Information
 
Greg Browne, CFO
Cyberonics, Inc.
100 Cyberonics Blvd.
Houston, TX 77058
Main:  (281) 228-7262
Fax:  (281) 218-9332
ir@cyberonics.com


 
 
 


CYBERONICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited except where indicated)



   
For the Thirteen
Weeks Ended
  
For the Fourteen
Weeks Ended
  
For the Fifty-Two
Weeks Ended
  
For the Fifty-Three
Weeks Ended
   
April 29, 2011
  
April 30, 2010
  
April 29, 2011
  
April 30, 2010
                         
Net sales
  
$
51,122,590
    
$
47,734,987
    
$
190,464,398
    
$
167,775,672
  
Cost of sales
    
6,199,158
      
5,497,103
      
23,020,032
      
20,907,595
  
Gross Profit
    
44,923,432
      
42,237,884
      
167,444,366
      
146,868,077
  
Operating Expenses:
                                
Selling, general and administrative
    
24,280,217
      
23,725,693
      
89,654,039
      
87,941,405
  
Research and development
    
7,613,096
      
6,276,618
      
28,602,684
      
22,064,800
  
Total Operating Expenses
    
31,893,313
      
30,002,311
      
118,256,723
      
110,006,205
  
Income from Operations
    
13,030,119
      
12,235,573
      
49,187,643
      
36,861,872
  
                                 
Interest income
    
83,058
      
9,598
      
262,298
      
92,602
  
Interest expense
    
(98,815
)
    
(199,914
)
    
(397,975
)
    
(1,430,590
)
Gain on early extinguishment of debt
    
-
      
129,754
      
83,074
      
3,172,231
  
Other expense, net
    
(86,514
)
    
(551,951
)
    
(470,109
)
    
(207,644
)
                                 
Income before income taxes
    
12,927,848
      
11,623,060
      
48,664,931
      
38,488,471
  
Income  tax expense (benefit)
    
5,498,651
      
32,756
      
1,939,221
      
(39,960,413
) 
 
                                
Net income
  
$
7,429,197
    
$
11,590,304
    
$
46,725,710
    
$
78,448,884
  
                                 
Basic income per share
  
$
0.26
    
$
0.42
    
$
1.67
    
$
2.83
  
Diluted income per share
  
$
0.26
    
$
0.41
    
$
1.64
    
$
2.67
  
 
                                
Shares used in computing basic income per share
    
                     28,354,786
      
27,761,553
      
28,050,638
      
27,702,731
  
Shares used in computing diluted income per share
    
                         28,964,527
      
28,372,751
      
28,609,619
      
                     28,696,375
  


 
 
 

CYBERONICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited except where indicated)



   
April 29, 2011 
  
April 30, 2010
         
(Audited)
  
ASSETS
  
             
Current Assets
            
Cash and cash equivalents
  
$
89,313,850
    
$
59,229,911
  
Restricted cash
    
-
      
1,000,000
  
Accounts receivable, net
    
28,578,622
      
26,185,143
  
Inventories
    
15,270,904
      
14,207,759
  
Deferred tax assets
    
13,738,703
      
12,126,758
  
Other current assets
    
4,698,097
      
2,495,019
  
Total Current Assets
    
151,600,176
      
115,244,590
  
Property and equipment, net
    
8,203,392
      
7,510,864
  
Intellectual property, net
    
5,237,857
      
1,948,266
  
Long-term investments
    
5,209,590
      
-
  
Deferred tax assets
    
40,137,463
      
29,624,489
  
Other assets
    
1,080,727
      
1,435,768
  
Total Assets
  
$
211,469,205
    
$
155,763,977
  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
  
                 
Current Liabilities
                
Accounts payables and accrued liabilities
  
$
22,086,093
    
$
23,325,253
  
Convertible notes
    
7,048,000
      
-
  
Total Current Liabilities
    
29,134,093
      
23,325,253
  
Long-term liabilities:
                
Convertible notes
    
-
      
15,460,000
  
Deferred license revenue and other
    
6,881,762
      
6,119,077
  
Total Long-Term Liabilities
    
6,881,762
      
21,579,077
  
Total Liabilities
    
36,015,855
      
44,904,330
  
Total Stockholders' Equity
    
175,453,350
      
110,859,647
  
Total Liabilities and Stockholders' Equity
  
$
211,469,205
    
$
155,763,977
  


 
 
 

CYBERONICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)



   
For the Fifty-Two
Weeks Ended
  
For the Fifty-Three
Weeks Ended
   
April 29, 2011
  
April 30, 2010
             
Cash Flow From Operating Activities:
            
Net Income
  
$
46,725,710
    
$
78,448,884
  
Non-Cash items included in Net Income:
                
Gain on early extinguishment of debt
    
(83,074
)
    
(3,172,231
)
Stock-base compensation
    
6,365,003
      
8,622,949
  
Deferred income taxes
    
1,101,763
      
(41,335,107
) 
Unrealized gain in foreign currency transactions
    
(1,648,479
)
    
(68,970
) 
Other
    
1,764,002
      
1,078,991
  
Changes in Operating Assets and Liabilities:
                
Accounts receivable, net
    
(1,952,789
)
    
(3,825,340
)
Inventories
    
(819,399
)
    
(1,509,542
)
Other
    
(1,580,630
) 
    
4,645,853
  
Net Cash Provided By Operating Activities
    
49,872,107
      
42,885,487
  
Cash Flow From Investing Activities:
                
Release of restricted cash
    
1,000,000
      
-
  
Acquired intellectual property
    
(3,844,401
)
    
(2,000,000
)
Purchases of property and equipment
    
(3,542,599
)
    
(4,122,607
)
Investments in convertible debt securities
    
(5,000,000
)
    
(100,000
)
Net Cash Used in Investing Activities
    
(11,387,000
)
    
(6,222,607
)
Cash Flow From Financing Activities:
                
Repurchase of convertible notes
    
(8,241,260
)
    
(43,046,250
)
Proceeds from exercise of options for common stock
    
15,230,997
      
1,024,960
  
Purchase of treasury stock
    
(14,177,574
)
    
(1,697,861
)
Net Cash Used in Financing Activities
    
(7,187,837
)
    
(43,719,151
)
                 
Effect of Exchange Rate Changes on Cash and Cash Equivalents
    
(1,213,331
)
    
60,703
  
                 
Net Increase (Decrease) in Cash and Cash Equivalents
    
30,083,939
      
(6,995,568
)
Cash and Cash Equivalents at Beginning of Period
    
59,229,911
      
66,225,479
  
Cash and Cash Equivalents at End of Period
  
$
89,313,850
    
$
59,229,911
  


Stock widget

Investing forum

CYBERONICS INC Reports