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Theragenics Reports Revenue & Earnings for Q4 & Year-End 2011
Posted February 23, 2012
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Acquisition of Core Oncology Customer Base Expands Brachy Market Presence
BUFORD, Ga.--(BUSINESS WIRE)--Theragenics Corporation (NYSE: TGX), a medical device company serving the surgical products and prostate cancer treatment markets, today announced consolidated financial results for the fourth quarter and year-ended December 31, 2011.
Highlights
• Consolidated revenue
• $19.9 million for the fourth quarter, down 4% from 2010
• $82.7 million for the year, up 1% over 2010
• Segment revenue
• Surgical products revenue down 5% in fourth quarter vs. 2010 and up 1% for year
• Brachytherapy revenue up 1% in fourth quarter vs. 2010 and up 1% for year
• Earnings per share
• $0.01 in the fourth quarter of 2011 vs. $0.01 in 2010
• $0.09 for 2011 vs. $0.06 in 2010
• Adjusted EBITDA
• $2.6 million in the fourth quarter of 2011 vs. $2.4 million in 2010
• $13.5 million for 2011 vs. $11.6 million for 2010
• At December 31, 2011, cash, cash equivalents and marketable securities were $41.2 million, credit facility borrowings were $23.7 million, resulting in a net positive position of $17.5 million
• Acquisition of Core Oncology's prostate brachytherapy customer base on February 17, 2012 is expected to substantially increase the Company's share of the iodine-125 segment of the brachy market
• $5 million to $6 million of incremental revenue expected in brachytherapy segment for remaining portion of calendar 2012
• Expected to be accretive to earnings and generate positive operating cash flow in 2012
• Total earn-out based purchase price is expected to be approximately $7.5 million to $10.5 million, which is based on anticipated revenue in the earn-out period of $10 million to $13 million from the acquired customers, in excess of a $2.5 million threshold amount.
Consolidated Results
Earnings per share in 2011 were $0.01 in fourth quarter compared to $0.01 in 2010. For the year, EPS was $0.09 compared to $0.06 in 2010. Special items had no effect on EPS in the fourth quarter of 2011 and reduced EPS by $0.02 in the fourth quarter of 2010. For the full year, special items reduced EPS by $0.01 in 2011 and by $0.06 in 2010. Pre-tax amounts for special items that affected earnings in each of the periods are detailed in Table V to this press release.
Segment Results
Surgical Products Segment
Revenue in our surgical products segment was $14.3 million in fourth quarter 2011, a decrease of 5% from fourth quarter of 2010. For the year revenue was $59.4 million, an increase of 1% over 2010. Our surgical products segment incurred a loss from operations of $480,000 in the fourth quarter of 2011 compared to operating income of $63,000 in the fourth quarter of 2010. Pre-tax charges for special items totaled $305,000 in the fourth quarter of 2010. There were no special charges in the fourth quarter of 2011. For the full year, operating income was $607,000 compared to $215,000 in 2010. Pre-tax charges for special items totaled $218,000 in 2011 and $1.6 million in 2010. Pre-tax charges for special items are detailed in Table V to this press release.
"Our surgical products business experienced headwinds in the fourth quarter. Those headwinds were both customer and operational specific. Customer erratic ordering patterns vary and have been mentioned throughout the year but were magnified in the fourth quarter. ERP implementation also affected one of our business units in the fourth quarter," stated M. Christine Jacobs, Chairman and CEO. "Underlying demand in our surgical products segment remains strong and we believe fourth quarter does not portend a systemic slowdown of momentum. Indeed, our open orders at the end of 2011 were 7% higher than at the end of 2010."
Brachytherapy Seed Segment
Revenue in our brachytherapy segment was $5.8 million in fourth quarter of 2011, a 1% increase over fourth quarter of 2010 and $24.1 million for the year, a 1% increase over 2010. Operating income was $1.1 million for the quarter compared to $439,000 in 2010. There were no special items for the fourth quarter of 2011. Pre-tax charges for special items totaled $848,000 in the fourth quarter of 2010. For the full year, operating income was $4.9 million compared to $3.7 million in 2010. Pre-tax charges for special items totaled $304,000 in 2011 and $1.6 million in 2010. Pre-tax charges for special items are detailed in Table V to this press release.
"2011 was the first time in six years we experienced year over year revenue growth in brachytherapy for a full calendar year," Jacobs said. "We are hopeful that brachy sales have reached a nadir. Our strategy of alliances and distributors continues to contribute to revenue. Of late, new data and press associated with this valuable treatment have accented this cost effective cure. We believe additional opportunities in the segment remain."
Acquisition of Core Prostate Brachytherapy Customers
On February 17, 2012, the Company acquired the prostate brachytherapy customer base of Core Oncology. This transaction is expected to substantially increase the Company's share of the iodine-125 segment of the brachy market and to add approximately $5 to $6 million of incremental revenue to the Company's brachytherapy segment for the remaining portion of calendar 2012. For 2011, total brachytherapy segment revenue was $24.1 million. This asset acquisition is also expected to be accretive to earnings and generate positive cash flow from operations in 2012.
"The Core transaction and additional iodine business demonstrates our continuing commitment to this treatment, the physicians and the patients who depend on it," said Jacobs. "Theragenics is a leading manufacturer and provider in the prostate brachytherapy market. Our legacy is improving lives and curing cancer. This transaction enhances the mission and expands our reach."
Conclusion
Ms. Jacobs concluded, "While our surgical product revenue growth was soft in 2011, we experienced our fifth consecutive year of organic growth in that business. We did so during the past three years in an economic recession with significant macroeconomic uncertainty. Our brachytherapy business continues to deliver healthy profits and cash flows. We believe our brachy business turned a corner with our first calendar year of revenue growth since 2005 and now the Core transaction provides momentum for 2012. We plan to continue to focus on increasing profitability, streamlining operations and continuing growth in both business segments. 2011 was our seventh consecutive year of record revenue."
Tables I and II to this press release contain condensed consolidated statements of earnings and balance sheets. Segment information, including revenue and operating income (loss) by segment, are summarized in Table III. Table IV includes a reconciliation of GAAP reported net earnings to net earnings before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA). Table V includes a detail of our special items.
Theragenics will host a conference call today at 11:00 a.m. Eastern Time. To access the call, dial 877-407-4019 or 201-689-8337. This call is also being broadcast live over the Internet, and a recording will be available for one month on our website. To access the webcast, log on to www.theragenics.com and select Investor Relations followed by selecting "Company Presentations." You can also access a phone replay of the call until midnight, March 1, 2012 by dialing 877-660-6853 or 201-612-7415, and entering the account # 372 and replay ID 387823.
Theragenics Corporation (NYSE: TGX) operates two business segments: its surgical products business and its brachytherapy seed business. The surgical products business (www.cpmedical.com, www.galtmedical.com, www.needletech.com) manufactures and distributes wound closure, vascular access, and specialty needle products. Wound closure products include sutures, needles and other surgical products. Vascular access includes introducers, guidewires and related products. Specialty needles include coaxial, biopsy, spinal and disposable veress needles, access trocars, and other needle-based products. The surgical products segment serves a number of markets and applications, including, among other areas, interventional cardiology, interventional radiology, vascular surgery, orthopedics, plastic surgery, dental surgery, urology, veterinary medicine, pain management, endoscopy, and spinal surgery. Theragenics' brachytherapy business manufactures, markets and distributes "seeds" used primarily in the minimally invasive treatment of localized prostate cancer. The Company's brachytherapy product line includes its palladium-103 TheraSeed® device (www.theraseed.com), and its iodine-125 I-Seed device, both of which are used primarily in the minimally invasive treatment of localized prostate cancer. The terms "Company", "we", "us", or "our" mean Theragenics Corporation and all entities included in our consolidated financial statements. For additional information, call our Investor Relations Department at (800) 998-8479 or visit www.theragenics.com.
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