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Cyberonics Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: June 15, 2012 01:16PM
Cyberonics Inc. (CYBX) filed Annual Report for the period ended 2012-04-27. Cyberonics Inc has a market cap of $1.13 billion; its shares were traded at around $42.75 with a P/E ratio of 29.2 and P/S ratio of 5.2.
Highlight of Business Operations:U.S. net product sales for the 52 weeks ended April 27, 2012 increased $20.2 million, or 12.5%, as compared to the 52 weeks ended April 29, 2011, due to a sales volume increase of 6.9% and increase average selling price of 5.6%. The average selling price increased due to continued higher market penetration of our Demipulse® generators, the limited commercial release of our AspireHC generator and price increases in January of 2011 and January 2012.
U.S. net product sales for the 52 weeks ended April 29, 2011 increased by $26.2 million, or 19.4%, as compared to the 53 weeks ended April 30, 2010, due to a sales volume increase of 11.8% and an increase in average selling price of 7.6%. The average selling price increased due to continued higher market penetration of our Demipulse® generators and our PerenniaDURAtm leads, and beginning in the February 2011, the first sales of our AspireHC generators. In addition, prices increased in January 2010 and January 2011.
International net product sales for the 52 weeks ended April 27, 2012 increased by $7.8 million, or 28.2%, as compared to the 52 weeks ended April 29, 2011, due to a sales volume increase of 18.5% and an increased average selling price of 9.7%. Sales volume increased due to higher sales in most international markets. The average selling prices increased due to a favorable foreign currency impact of 2.5% and a higher proportion of direct sales rather than to distributors. Sales to distributors are generally at lower prices than sales through our own employees.
International net product sales for the 52 weeks ended April 29, 2011 decreased by $3.5 million, or 11.1%, as compared to the 53 weeks ended April 30, 2010, due to a sales volume decrease of 8.7% and a decrease in the average selling price of 2.4%. Sales volume decreased due to the extra week in fiscal year 2010, as compared to fiscal year 2011, and due to lower sales in key European countries, partially offset by increased sales in Japan. The average selling price decreased due to an unfavorable foreign currency impact of 2.0% and a higher proportion of sales to distributors.
Cost of sales consists primarily of direct labor, allocated manufacturing overhead and the acquisition cost of raw materials and components. Royalty costs were a significant component of cost of sales in fiscal years 2011 and 2010 but less significant in fiscal year 2012. Our cost of sales as a percent of net sales for the 52 weeks ended April 27, 2012 decreased by 3.1 percentage points to 9.0% when compared to the 52 weeks ended April 29, 2011. This decrease was primarily a result of a reduction in royalty cost, as well as improved efficiencies due to the savings realized with the purchase of our headquarters building and to higher production volumes. The decrease in royalty cost was the result of the elimination of the 3% epilepsy patent royalty fee after the patent expiration date on July 16, 2011. We paid royalty fees of $1.2 million, $5.6 million and $4.9 million in fiscal years 2012, 2011 and 2010, respectively.
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