ARDEN HILLS, Minn., April 29, 2019 (GLOBE NEWSWIRE) -- IntriCon Corporation (NASDAQ: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature body-worn devices, today announced financial results for its first quarter ended March 31, 2019.

Recent Highlights:

  • Quarterly revenue of $30.1 million, an 18.7% increase over the prior-year first quarter
  • Gross margin of 29.1%, compared to 33.2% in the prior-year period
  • Net income per share of $0.08 versus $0.10 in the 2018 first quarter
  • Revenue growth from largest medical customer of 26.6% compared to first quarter 2018
  • Announced changes to Board of Directors, effective May 1, 2019
    ○  Raymond Huggenberger, former Inogen CEO, appointed as a director
    ○  Michael McKenna retired from his position as Chairman of the Board
    ○  Philip Smith, a current director, elected Chairman of the Board
  • Announced leadership promotions
    ○  Chief Financial Officer Scott Longval assumed additional responsibilities as Chief Operating Officer
    ○  Michael Geraci named Senior Vice President, Sales and Marketing
    ○  Dennis Gonsior named Senior Vice President, Global Operations
    ○  Greg Gruenhagen named Senior Vice President, Quality and Regulatory Affairs

“We were pleased with our first quarter performance and execution, with progress made on each of the priorities we laid out at the start of the year,” said Mark Gorder, President and Chief Executive Officer of IntriCon. “In our Medical business, we continued to benefit from Medtronic’s on-going conversion to its MiniMed 670G system, and we were delighted to secure a new, large medical customer for our proprietary medical coils. In our Hearing Health business, we remain very encouraged by the expanding opportunity we see for our value-based hearing solutions and the relationships we maintain with our current partners. In addition, we are excited to pursue new opportunities for growth spurred by the 2017 legislation that will open a significant new over-the-counter market.

“As we look forward, we will continue to meet the volume demands of our key customers and partners, while pursuing new business opportunities that can best leverage our core competencies and global infrastructure in order to accelerate growth and diversify our revenue base,” concluded Gorder.

First Quarter 2019 Financial Results
For the 2019 first quarter, the company reported net revenue of $30.1 million, up 18.7% from $25.4 million in the comparable prior-year period. The increase was primarily due to year-over-year revenue gains from its diabetes and medical coil markets.

By business line, revenue in IntriCon’s Medical business increased 30.5% in the first quarter of 2019 versus the comparable prior-year period. The gain was primarily driven by the ongoing production of wireless continuous glucose monitoring systems as a result of its long-standing relationship with Medtronic’s Diabetes division. Revenue to this customer increased 26.6% in the first quarter over the comparable prior-year period.

Hearing Health revenue was relatively flat in the first quarter of 2019 compared to the prior-year first quarter. The modest revenue during the quarter was largely due to the impact of a customer’s product cycle in the company’s Indirect-to-End-Consumer channel and measured advertising spend in its Direct-to-End-Consumer channel.

Gross margin in the first quarter of 2019 was 29.1%, down from 33.2% in the prior-year first quarter. Gross margins were constrained by the ongoing validation and qualification expense as well as excess capacity related to the recent manufacturing expansion.

Operating expenses for the first quarter were $7.9 million, compared to $7.1 million in the comparable prior-year period. The increase stemmed from increased advertising investments in our Direct-to-End-Consumer and support costs related to key new business development initiatives.

The company posted net income of approximately $775,000 or $0.08 per diluted share, versus approximately $769,000 or $0.10 per diluted share, for the 2018 first quarter.  

2019 Guidance
IntriCon reiterated its previously stated guidance for the full year 2019, which includes revenue of $128 million to $133 million and gross margins of 30.0% to 31.5%. The company continues to anticipate year-over-year revenue growth and gross margin improvement for the full year 2019 with the timing of certain orders related to its largest customer’s on-going global commercial product launch now weighted towards the second half of the year.

Conference Call
IntriCon’s management team will hold a conference call today, Monday, April 29, 2019, beginning at 4:00 p.m. CT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by dialing 866-795-7248 for domestic callers or 470-495-9160 for international callers, using conference ID: 2084667. A live and archived webcast will be available on the “Investors” sections of the company’s website at: www.IntriCon.com.

About IntriCon Corporation
Headquartered in Arden Hills, Minn., IntriCon Corporation designs, develops and manufactures miniature and micro-miniature body-worn devices. These advanced products help medical, healthcare and professional communications companies meet the rising demand for smaller, more intelligent and better-connected devices. IntriCon has facilities in the United States, Asia, the United Kingdom and Europe. The company’s common stock trades under the symbol “IIN” on the NASDAQ Global Market. For more information about IntriCon, visit www.intricon.com.

Forward-Looking Statements
Statements made in this release and in IntriCon’s other public filings and releases that are not historical facts or that include forward-looking terminology, including estimates of future results, are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be affected by known and unknown risks, uncertainties and other factors that are beyond IntriCon’s control, and may cause IntriCon’s actual results, performance or achievements to differ materially from the results, performance and achievements expressed or implied in the forward-looking statements. These risks, uncertainties and other factors are detailed from time to time in the company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2018. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.

Investor Contact
Leigh Salvo
(415) 937-5404
investorrelations@intricon.com

 
INTRICON CORPORATION
MARKET REVENUE
(Unaudited)
        
  FIRST QUARTER
($ in 000's)2019 2018 Growth
        
Medical$  20,793  $  15,933  30.5%
Diabetes 17,164  13,562 26.6%
Other Medical 3,629  2,371 53.1%
        
Hearing Health   7,549     7,601  -0.7%
Value Based Direct-to-End-Consumer 1,630  1,785 -8.7%
Value Based Indirect-to-End-Consumer 2,577  2,629 -2.0%
Legacy OEM 3,342  3,187 4.9%
        
Professional Audio Communications   1,767     1,829  -3.4%
        
Total$  30,109  $  25,363  18.7%
        


 
INTRICON CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
  
 Three Months Ended
 March 31, 2019 March 31, 2018
      
Revenue, net$30,109  $25,363 
Cost of goods sold 21,358   16,951 
Gross profit 8,751   8,412 
      
Operating expenses:     
Sales and marketing 3,536   2,840 
General and administrative 3,425   3,061 
Research and development 965   1,159 
Total operating expenses 7,926   7,060 
Operating income 825   1,352 
      
Interest income (expense), net 215   (188)
Other expense, net (134)  (208)
Income before income taxes 906   956 
Income tax expense 131   187 
Net income$775  $769 
      
Income per share of common stock:     
Net income per share, Basic:$0.09  $0.11 
Net income per share, Diluted:$0.08  $0.10 
      
Average shares outstanding:     
Basic 8,705   6,929 
Diluted 9,382   7,843 
      


 
INTRICON CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
      
  March 31,  December 31,
  2019   2018 
Current assets:     
Cash, cash equivalents and restricted cash$13,190  $8,047 
Short-term investments 16,008   38,093 
Accounts receivable, less allowance for doubtful accounts of $368 at March 31, 2019 and $807 at December 31, 2018 10,493   11,479 
Inventories 19,134   18,981 
Contract assets 6,320   5,624 
Other current assets 1,541   2,320 
Total current assets 66,686   84,544 
Machinery and equipment 38,202   37,161 
Less:  Accumulated depreciation 25,941   25,429 
Net machinery and equipment 12,261   11,732 
      
Goodwill 10,808   10,808 
Intangible assets, net 2,546   2,585 
Operating lease asset 5,518   - 
Investment in partnerships 1,324   2,091 
Long-term investments 15,228   - 
Other assets, net 6,525   3,488 
Total assets$120,896  $115,248 
      
Current liabilities:     
Current financing leases$104  $- 
Current operating leases 1,700   - 
Accounts payable 12,237   13,191 
Accrued salaries, wages and commissions 2,572   4,409 
Other accrued liabilities 4,692   4,047 
Total current liabilities 21,305   21,647 
      
Noncurrent financing leases 95   - 
Noncurrent operating leases 4,030   - 
Other postretirement benefit obligations 366   377 
Accrued pension liabilities 733   706 
Other long-term liabilities 1,306   544 
Total liabilities 27,835   23,274 
Commitments and contingencies     
Shareholders’ equity:     
Common stock, $1.00 par value per share; 20,000 shares authorized; 8,714 and 8,664 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively 8,714   8,664 
Additional paid-in capital 85,131   84,999 
Retained earnings (accumulated deficit) 266   (509)
Accumulated other comprehensive loss (797)  (927)
Total shareholders' equity 93,314   92,227 
Non-controlling interest (253)  (253)
Total equity 93,061   91,974 
Total liabilities and equity$120,896  $115,248