Surmodics Inc. has a market cap of $346.9 million; its shares were traded at around $19.85 with a P/E ratio of 28 and P/S ratio of 2.9. Surmodics Inc. had an annual average earning growth of 41.3% over the past 10 years. GuruFocus rated Surmodics Inc. the business predictability rank of 3-star.SRDX is in the portfolios of Bill Frels of MAIRS & POWER INC, PRIMECAP Management, Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:Therapeutic. Revenue in Therapeutic was $15.1 million in the first quarter of fiscal 2010, a decrease of 74% compared with $58.9 million in the first quarter of fiscal 2009. The decrease in total revenue reflects the recognition of revenue of approximately $34.8 million that had previously been deferred, associated with the Merck collaborative research and license agreement and recognition of a $9 million milestone payment received in the first quarter of fiscal 2009 associated with the termination of the triamcinolone acetonide development program. The collaborative research and license agreement was terminated effective in the first quarter of fiscal 2009. Excluding these significant event-specific items in fiscal 2009, revenue was comparable for both periods. Therapeutic revenue is further characterized by the market-focused areas detailed above.
Ophthalmology revenue decreased $42.3 million, or 94%, in the first quarter of fiscal 2010, compared with the first quarter of fiscal 2009. The significant decrease relates to the recognition of previously deferred revenue associated with the terminated collaborative research and license agreement with Merck. In September 2008, following a strategic review of Mercks business and product development portfolio, Merck gave notice that it was terminating the collaborative research and license agreement as well as the supply agreement entered into in June 2007. The termination became effective in December 2008. In the first quarter of fiscal 2009, we recognized the revenue previously deferred totaling $34.8 million. In addition, we received and recognized a $9 million milestone payment from Merck associated with the termination of the triamcinolone acetonide development program.
We recorded total restructuring charges of approximately $1.8 million in connection with the reorganization. These pre-tax charges consisted of $0.5 million of severance pay and benefits expenses and $1.3 million of facility-related costs. Costs totaling $0.9 million have been paid, and we anticipate paying the remaining $0.9 million within the next twelve months.
Other income, net. Other income was $0.3 million in the first quarter of fiscal 2010, compared with $0.6 million in the first quarter of fiscal 2010. Income from investments was $0.3 million, compared with $0.7 million in the prior-year period. The decrease primarily reflects lower investment balances. In the first quarter of fiscal 2009, our pro rata net loss on our equity method investments was partially offset by $0.3 million of gains from our investment portfolio.
As of December 31, 2009, the Company had working capital of $32.2 million, of which $19.3 million consisted of cash, cash equivalents and short-term investments. Working capital increased $3.2 million from the September 30, 2009 level, driven principally by higher prepaid balances, income taxes receivable and lower accounts payable balances. Our cash, cash equivalents and short-term and long-term investments totaled $51.5 million at December 31, 2009, an increase of $3.6 million from $47.9 million at September 30, 2009. The Companys investments principally consist of U.S. government and government agency obligations and investment grade, interest-bearing corporate debt securities with varying maturity dates, the majority of which are five years or less. The Companys policy requires that no more than 5% of investments be held in any one credit issue, excluding U.S. government and government agency obligations. The primary investment objective of the portfolio is to provide for the safety of principal and appropriate liquidity while meeting or exceeding a benchmark (Merrill Lynch 1-3 Year Government-Corporate Index) total rate of return. Management plans to continue to direct its investment advisors to manage the Companys investments primarily for the safety of principal for the foreseeable future as it assesses other investment opportunities and uses of its investments.
We do not have any other credit agreements and believe that our existing cash, cash equivalents and investments, together with cash flow from operations, will provide liquidity sufficient to meet the below stated needs and fund our operations for the next twelve months. There can be no assurance, however, that SurModics business will continue to generate cash flows at current levels, and disruptions in financial markets may negatively impact the Companys ability to access capital in a timely manner and on attractive terms, if at all. Our anticipated liquidity needs for the remainder of fiscal 2010 include, but are not limited to, the following: capital expenditures related to the Alabama cGMP facility in the range of $3 million to $4 million; general capital expenditures in the range of $3 million to $5 million; contingent consideration payments, if any, related to our acquisitions of SurModics Pharmaceuticals, BioFX Laboratories, Inc. as well as the purchase of certain assets from PR Pharmaceuticals, Inc.; and any amounts associated with the repurchase of common stock under the authorization discussed above.
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