Amidst another day of red trading for US exchanges on Friday, Cyberonics Inc. (CYBX) is a rare bright spot. The maker of implantable medical devices posted fiscal second-quarter earnings that topped estimates and boosted its full-year guidance. The company markets its VNS Therapy System for treatment of refractory epilepsy and treatment-resistant depression. The system features a surgically implanted device that delivers pulsed electrical signals to the vagus nerve, sometimes called “cranial nerve X.”
For the quarter, Cyberonics said net sales were $63.0 million, up by 17 percent from $53.7 million in the year prior quarter. Adjusted income, which excluded at $1.3 million gain on warrant liability, rang-in at 44 cents per share, a 36 percent rise from 32 cents a share a year ago. Analysts were estimating earnings at 39 cents per share on revenue of $59.8 million.
Gross margin fell to 91.8 percent from 92.3 percent during the quarter.
Cyberonics has now beaten consensus Wall Street estimates in five consecutive quarters.
Adjusted EBITDA for the second quarter was $23.8 million. The company ended the quarter with more than $118 million in cash on hand and zero interest-bearing debt.
"The second quarter of fiscal 2013 was another record quarter for sales, the seventh consecutive quarter that revenues have reached a new level," commented Dan Moore, Cyberonics' President and Chief Executive Officer.
For the full year 2013, the company said that it now expects adjusted earnings between $1.56 and $1.62 per share, compared to its prior guidance of between $1.49 and $1.59 per share. It also predicts that net sales will be between $246 million and $249 million, ahead of earlier calls for net sales between $241 million and $244 million. Analysts were expecting earnings per share of $1.57.
During the second quarter, U.S. sales increased by 12 percent to 2,339 units and revenue above $50 million for the second straight quarter. International sales, which have been challenging for many companies given the financial turmoil overseas, rose from $8.6 million in Q2 fiscal 2012 to $11.1 million in Q2 fiscal 2013, despite unfavorable currency exchange rates that negatively impacted totals by $400,000. The gains were paced by more shipments to Japan, according to the Houston, Texas-based company.
During the latest quarter, Cyberonics invested 2 million euro (US$2.55 million) in German company cerbomed GmbH, a company developing a non-invasive neurostimulation device for the treatment of epilepsy. Cyberonics can raise the investment to 5.5 million euros and holds an exclusive option for sales and distribution rights should the product make it to market.
Shares are trading up Friday morning by about 9 percent at $51 each and are up more than 50 percent in 2012.
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