Welcome!

Mobile IoT Authors: Yeshim Deniz, Liz McMillan, Pat Romanski, Elizabeth White, Kevin Benedict

News Feed Item

IntriCon Reports 2012 Third-Quarter Results

IntriCon Corporation (NASDAQ: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature body-worn devices, today announced financial results for its third quarter ended September 30, 2012.

For the 2012 third quarter, the company reported net sales of $14.9 million, an increase of 7.4 percent from the prior-year period. IntriCon had net income of $217,000, or $0.04 per diluted share, compared to a net loss of $(489,000), or $(0.09) per diluted share, for the 2011 third quarter. Included in 2012 third-quarter results was a one-time gain of $822,000, or $0.14 per diluted share, from the previously disclosed sale of the company’s 50-percent ownership interest in Global Coils, to its Switzerland-based joint venture partner, Audemars SA.

“There were encouraging developments across all of our businesses in the third quarter,” said Mark S. Gorder, president and chief executive officer of IntriCon. “Professional audio posted record sales that were up 53.4 percent over the 2011 third quarter as strong demand continued for securities products domestically and headset products internationally.

“On the medical front, we increased sales over the prior-year period with our largest medical customer, Medtronic. And in hearing health, hi HealthInnovations, a UnitedHealth Group Company, expanded its innovative hearing aid program to more than 26 million people enrolled in its employer-sponsored and individual health benefit plans. Hearing health sales, though, declined 6.9 percent over the prior year, primarily due to an expected pause in orders from hi HealthInnovations and continued softness in the conventional hearing health market.”

As a percentage of 2012 third-quarter sales, healthcare-related revenue (hearing health and medical combined) totaled 67.7 percent (30.6 percent hearing health and 37.1 percent medical), with professional audio communications at 32.3 percent. This compares to 2011 healthcare-related revenue of 77.3 percent (35.3 percent hearing health and 42.0 percent medical), with professional audio communications at 22.7 percent.

Gross profit margins were down slightly to 21.6 percent from 22.2 percent in the prior-year third quarter. The decline was primarily due to higher cost of goods sold, stemming from increased manufacturing infrastructure costs in Singapore and Indonesia.

“The infrastructure in Singapore and Indonesia has positioned IntriCon well for additional low-cost labor intensive opportunities,” said Gorder. “As we transfer select labor-intensive programs to these locations, we believe we will be more cost competitive as a whole, and we expect to experience margin improvement.”

IntriCon reduced its operating expenses in the third quarter, despite higher sales.

Nine-Month Results
For the 2012 nine-month period, IntriCon reported net sales of $47.3 million and net income of $377,000, or $0.06 per diluted share. This is up from 2011 net sales of $41.6 million and a net loss of $(1.1 million), or $(0.19) per diluted share. Hearing health sales rose 17.4 percent over the prior-year nine months, with medical and professional audio up 4.7 percent and 24.2 percent, respectively. Included in 2012 nine-month results was the one-time gain of $822,000, or $0.14 per diluted share, from the Global Coils sale.

As a percentage of 2012 nine-month sales, healthcare-related revenue (hearing health and medical combined) totaled 76.5 percent (38.8 percent hearing health and 37.7 percent medical), with professional audio communications at 23.5 percent. This compares to 2011 healthcare-related revenue of 78.5 percent (37.6 percent hearing health and 40.9 percent medical), with professional audio communications at 21.5 percent.

Gross profit margins for the 2012 nine months were 23.4 percent, up from 22.4 percent in the prior-year period, primarily due to volume increases, partially offset by increased manufacturing infrastructure in Singapore and Indonesia.

hi HealthInnovations
According to Gorder, “As previously disclosed, we’ve satisfied hi HealthInnovations’ initial product ramp-up needs for 2012. In the near-term, we expect minimal new orders; however, we continue to be optimistic about the long-term prospects of this program.

“We are encouraged by hi HealthInnovations’ progress building the necessary infrastructure to provide high-quality, affordable hearing healthcare to their customers. UnitedHealthcare recently announced that it is making hi HealthInnovations' high-tech, custom-programmed hearing aids available at a discounted price to more than 26 million people enrolled in its employer-sponsored and individual health benefit plans. We believe this will drive significant growth for IntriCon in 2013, specifically in the second half of the year.”

Business Update
IntriCon recently introduced its new Audion6™, a six-channel hearing aid amplifier, and the Lumen™ 1000 wireless hearing system at the 57th annual International Congress of Hearing Aid Acousticians in Germany. Audion6 is a feature-rich amplifier designed to fit a wide array of applications. In addition to multiple compression channels, the amplifier has a complete set of proven adaptive features which greatly improve the user experience.

Lumen 1000 is a next-generation, wireless hearing system within IntriCon’s existing Lumen product family. Lumen 1000 incorporates the company’s intuitive Physiolink™ wireless technology to allow clear communication. With flexStrem™, voiceStream™, linkStream™, and callStream™ accessories, the device can wirelessly stream music, television, audio or a companion’s voice—making it significantly more versatile and effective than traditional hearing devices. IntriCon also believes this technology and functionality holds great potential in the non-traditional hearing health market.

Within its medical business, year over year sales were down slightly in the third quarter. Said Gorder, “We experienced a temporary slowdown in medical growth in the third quarter. This was primarily due to order timing and customer inventory management. We’re already seeing medical sales rebound, and we expect them to strengthen in the fourth quarter to levels consistent with the first half of the year.

“The shift to small and lightweight, advanced body-worn medical devices continues. Our core technology and product offerings have the proven ability to connect patients and caregivers in non-traditional ways, which positions us to help our customers and their patients. Furthermore, we intend to focus more capital and resources in sales and marketing to expand our reach to other large medical device and healthcare companies that we are not doing business with today. ”

On the cardiac front, IntriCon is delivering demo units of its two FDA-approved wireless cardiac diagnostic monitoring devices—Centauri™ and Sirona™— to targeted customers. The company continues to anticipate these products will generate initial revenue in the fourth quarter and ramp-up in 2013.

Third-quarter professional audio communications sales were very strong, up more than 50 percent from the prior-year period. The company continues delivery on its significant contract with the Singapore government, providing technically advanced headsets to be worn in difficult listening environments. This contract will run through the end of 2012. In addition, IntriCon has seen steady growth in its securities business.

Looking Ahead
Concluded Gorder, “We remain steadfast in our goals for 2012: developing new core technologies while enhancing existing ones; securing additional market-changing relationships with leaders in the healthcare industry; expanding and driving efficiencies at our international manufacturing facilities; increasing our sales and marketing resources; and driving profitability.”

Conference Call Today
As previously announced, the company will hold an investment community conference call today, Wednesday, November 7, 2012, beginning at 4:00 p.m. CT. Mark Gorder, president and chief executive officer, and Scott Longval, chief financial officer, will review third-quarter performance and discuss the company’s strategies. To join the conference call, dial: 1-888-549-7880 (international 1-480-629-9643) and provide the conference identification number 4571342 to the operator.

A replay of the conference call will be available one hour after the call ends through 11:59 p.m. CT on Tuesday, November 13, 2012. To access the replay, dial 1-800-406-7325 (international 1-303-590-3030) and enter access code: 4571342.

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 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 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, 2011. 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.

 
 
IntriCon Corporation
Consolidated Condensed Statements of Operations
(in thousands, except per share data)
               
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2012 2011 2012 2011

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

 
Sales, net $ 14,904 $ 13,873 $ 47,268 $ 41,584
Cost of sales   11,679     10,789     36,209     32,261  
Gross profit 3,225 3,084 11,059 9,323
 
Operating expenses:
Sales and marketing 734 734 2,363 2,422
General and administrative 1,504 1,486 4,744 4,382
Research and development   1,243     1,326     3,513     3,600  
Total operating expenses   3,481     3,546     10,620     10,404  
Operating income (loss) (256 ) (462 ) 439 (1,081 )
 
Interest expense (210 ) (144 ) (588 ) (431 )
Equity in income (loss) of partnerships (39 ) (12 ) (77 ) 317
Gain on sale of investment in partnership 822 -- 822 --
Other (loss) expense   (36 )   69     (64 )   32  
Income (loss) before income taxes 281 (549 ) 532 (1,163 )
 
Income tax expense (benefit)   64     (60 )   155     (90 )
Net income (loss) $ 217   $ (489 ) $ 377   $ (1,073 )
 
 
Net income (loss) per share:
Basic $ 0.04 $ (0.09 ) $ 0.07 $ (0.19 )
Diluted $ 0.04 $ (0.09 ) $ 0.06 $ (0.19 )
 
Average shares outstanding:
Basic 5,674 5,600 5,666 5,576
Diluted 5,854 5,600 5,910 5,576
 
 
IntriCon Corporation
Consolidated Condensed Balance Sheets
(in thousands, except per share data)
 
    September 30,    
2012 December 31,
(Unaudited) 2011
Current assets:
Cash $ 244 $ 119
Restricted cash 553 540
Accounts receivable, less allowance for doubtful accounts 8,295 8,545
Inventories 11,976 11,720
Refundable income taxes -- 82
Other current assets   1,074     652  
Total current assets 22,142 21,658
 
Machinery and equipment 40,547 39,170
Less: Accumulated depreciation   33,563     32,164  
Net machinery and equipment 6,984 7,006
 
Goodwill 9,709 9,709
Investment in partnerships 812 1,283
Other assets, net   1,268     1,074  
Total assets $ 40,915   $ 40,730  
 
Current liabilities:
Checks written in excess of cash

$

637 $ 396
Current maturities of long-term debt 3,225 2,883
Accounts payable 4,813 6,298
Accrued salaries, wages and commissions 2,134 1,617
Deferred gain 110 110
Partnership payable 240 240
Other accrued liabilities   2,422     1,907  
Total current liabilities 13,581 13,451
 
Long-term debt, less current maturities 7,530 8,217
Other postretirement benefit obligations 670 685
Accrued pension liabilities 415 431
Deferred gain 312 385
Other long-term liabilities   139     115  
Total liabilities 22,647 23,284
 
Commitments and contingencies
 
Shareholders’ equity:
Common stock, $1.00 par value per share; 20,000 shares authorized; 5,680 and 5,646 shares issued outstanding at September 30, 2012 and December 31, 2011, respectively

5,680

5,646

Additional paid-in capital 15,669 15,259
Accumulated deficit (2,692 ) (3,069 )
Accumulated other comprehensive loss   (389 )   (390 )
Total shareholders' equity   18,268     17,446  
Total liabilities and shareholders’ equity $ 40,915   $ 40,730  

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

IoT & Smart Cities Stories
SYS-CON Events announced today that Silicon India has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Published in Silicon Valley, Silicon India magazine is the premiere platform for CIOs to discuss their innovative enterprise solutions and allows IT vendors to learn about new solutions that can help grow their business.
We are seeing a major migration of enterprises applications to the cloud. As cloud and business use of real time applications accelerate, legacy networks are no longer able to architecturally support cloud adoption and deliver the performance and security required by highly distributed enterprises. These outdated solutions have become more costly and complicated to implement, install, manage, and maintain.SD-WAN offers unlimited capabilities for accessing the benefits of the cloud and Internet. ...
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
DXWorldEXPO LLC announced today that "IoT Now" was named media sponsor of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER gives detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPOalso offers sp...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...