IntriCon Corp. (IIN, Financial) filed Quarterly Report for the period ended 2012-06-30.
Intricon Corporation has a market cap of $26.4 million; its shares were traded at around $4.6 with and P/S ratio of 0.5.
Net sales in our hearing health business for the three and six months ended June 30, 2012 increased 17.3 percent and 28.6 percent, respectively, compared to the same periods in 2011, primarily driven by sales to hi HealthInnovations. Currently, we have satisfied hi HealthInnovations’ initial product ramp-up needs for 2012 and in the near term we expect minimal new orders. The hi HealthInnovations program is based on a development of an innovative new distribution channel, and while hi HealthInnovations continues to make progress, there are challenges to be overcome and it is difficult to project program needs at this time; however, we do believe in the long-term potential of this program. We continue to support hi HealthInnovations in building the infrastructure to provide high quality, affordable hearing healthcare to their customers. Examples of our efforts include the development and validation of hardware and software, providing quality management system support, and device tracking and analysis support. We believe this will position hi HealthInnovations to aggressively expand this program to their customer base. We believe long term prospects in our hearing health business remain strong as we continue to develop and launch advanced technologies, such as our nanoDSP, Overtus, APT and Lumen products, which will enhance the performance of hearing devices. Further, we believe the market indicators in the hearing health industry, including the aging world population, suggest long-term industry growth.
Net sales to the professional audio device sector increased 19.7 percent and 8.4 percent, respectively, for the three and six months ended June 30, 2012 compared to the same periods in 2011. The significant increase over prior year related to the partial fulfillment of a large headset contract. The remainder of this order will be filled in the second half of the 2012. We believe our extensive portfolio of communication devices that are portable, smaller and perform well in noisy or hazardous environments will provide for future long-term growth in this market.
In 2012, gross profit increased primarily due to greater sales across our three core markets, partially offset by infrastructure costs in Asia. The Company further expanded its low-cost manufacturing capabilities during the six months ended June 30, 2012. The continued ramp-up of the Companys Indonesian facility provides low-cost manufacturing options to drive ongoing margin improvement and the ability to pursue additional high-volume manufacturing opportunities. In addition, the Company increased the medical manufacturing infrastructure at its Singapore facility in anticipation of future medical business. While the investment in infrastructure at both facilities constrained margins, the Company anticipates favorable margin impact beginning in the 2012 third quarter.
The outstanding principal balance of the term loan, as amended, is payable in quarterly installments of $250, commencing with the calendar quarter ended September 30, 2011. Any remaining principal and accrued interest is payable on August 13, 2014. IntriCon is also required to use 100% of the net cash proceeds of certain asset sales (excluding inventory and certain other dispositions), sale of capital securities or issuance of debt to pay down the term loan. The outstanding principal balance of the term loan was $3,000 and $3,500 at June 30, 2012 and December 31, 2011, respectively.
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Intricon Corporation has a market cap of $26.4 million; its shares were traded at around $4.6 with and P/S ratio of 0.5.
Highlight of Business Operations:
For the three and six months ended June 30, 2012, we experienced an increase of 7.2 percent and 9.9 percent, respectively, in net sales in the medical market compared to the same periods in 2011, driven by higher sales to Medtronic and other key medical customers. This marks the sixth consecutive quarter of revenue growth in our medical business. Management believes there is an industry-wide trend toward further miniaturization and ambulatory operation enabled by wireless connectivity, referred to as bio-telemetry, which in the past resulted in further growth in our medical business. We are also working with our strategic partner, AME, on proprietary biotelemetry technologies that will enable us to develop new devices that connect patients and care givers, providing critical information and feedback.Net sales in our hearing health business for the three and six months ended June 30, 2012 increased 17.3 percent and 28.6 percent, respectively, compared to the same periods in 2011, primarily driven by sales to hi HealthInnovations. Currently, we have satisfied hi HealthInnovations’ initial product ramp-up needs for 2012 and in the near term we expect minimal new orders. The hi HealthInnovations program is based on a development of an innovative new distribution channel, and while hi HealthInnovations continues to make progress, there are challenges to be overcome and it is difficult to project program needs at this time; however, we do believe in the long-term potential of this program. We continue to support hi HealthInnovations in building the infrastructure to provide high quality, affordable hearing healthcare to their customers. Examples of our efforts include the development and validation of hardware and software, providing quality management system support, and device tracking and analysis support. We believe this will position hi HealthInnovations to aggressively expand this program to their customer base. We believe long term prospects in our hearing health business remain strong as we continue to develop and launch advanced technologies, such as our nanoDSP, Overtus, APT and Lumen products, which will enhance the performance of hearing devices. Further, we believe the market indicators in the hearing health industry, including the aging world population, suggest long-term industry growth.
Net sales to the professional audio device sector increased 19.7 percent and 8.4 percent, respectively, for the three and six months ended June 30, 2012 compared to the same periods in 2011. The significant increase over prior year related to the partial fulfillment of a large headset contract. The remainder of this order will be filled in the second half of the 2012. We believe our extensive portfolio of communication devices that are portable, smaller and perform well in noisy or hazardous environments will provide for future long-term growth in this market.
In 2012, gross profit increased primarily due to greater sales across our three core markets, partially offset by infrastructure costs in Asia. The Company further expanded its low-cost manufacturing capabilities during the six months ended June 30, 2012. The continued ramp-up of the Companys Indonesian facility provides low-cost manufacturing options to drive ongoing margin improvement and the ability to pursue additional high-volume manufacturing opportunities. In addition, the Company increased the medical manufacturing infrastructure at its Singapore facility in anticipation of future medical business. While the investment in infrastructure at both facilities constrained margins, the Company anticipates favorable margin impact beginning in the 2012 third quarter.
The outstanding principal balance of the term loan, as amended, is payable in quarterly installments of $250, commencing with the calendar quarter ended September 30, 2011. Any remaining principal and accrued interest is payable on August 13, 2014. IntriCon is also required to use 100% of the net cash proceeds of certain asset sales (excluding inventory and certain other dispositions), sale of capital securities or issuance of debt to pay down the term loan. The outstanding principal balance of the term loan was $3,000 and $3,500 at June 30, 2012 and December 31, 2011, respectively.
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