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Cyberonics Inc. Reports Operating Results (10-Q)

February 18, 2010 | About:
10qk

10qk

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Cyberonics Inc. (CYBX) filed Quarterly Report for the period ended 2010-01-22.

Cyberonics Inc. has a market cap of $521.8 million; its shares were traded at around $18.8 with a P/E ratio of 20.4 and P/S ratio of 3.6. CYBX is in the portfolios of Carl Icahn of Icahn Capital Management LP.
This is the annual revenues and earnings per share of CYBX over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CYBX.


Highlight of Business Operations:

Net sales for the thirteen weeks ended January 22, 2010 were $40.8 million, which consisted of U.S. net product sales of $32.1 million, international net product sales of $8.3 million and licensing revenue of $0.4 million. Net sales for the thirty-nine weeks ended January 22, 2010 were $120.0 million, which consisted of U.S. net product sales of $96.5 million, international net product sales of $22.4 million and licensing revenue of $1.1 million.

Research and Development (“R&D”) Expenses. R&D expenses are comprised of expenses related to our product and process development, product design efforts, clinical trials programs and regulatory activities. R&D expenses were approximately $5.6 million for the thirteen weeks ended January 22, 2010, which represented an increase of approximately $0.5 million, or 9.4%, compared to the thirteen weeks ended January 23, 2009. The increase was primarily due to an increase of approximately $1.3 million in our product development efforts with respect to the treatment of refractory epilepsy, which was offset by a decrease of approximately $0.6 million for clinical expenses related primarily to the depression dosing study. R&D expenses were approximately $15.8 million for the thirty-nine weeks ended January 22, 2010, which represented an increase of approximately $1.2 million, or 8.6%, compared to the thirty-nine ended January 23, 2009. The increase was primarily due to an increase of approximately $4.0 million in our product development efforts with respect to the treatment of refractory epilepsy, which was offset by a decrease of approximately $2.7 million for clinical and regulatory expenses related primarily to the dosing study and international activity.

Cash decreased by approximately $11.5 million, to $54.7 million, during the thirty-nine weeks ended January 22, 2010 due primarily to the repurchase of approximately $39.9 million principal value of our Convertible Notes at a purchase price of approximately $36.3 million and the purchases of property and equipment of approximately $2.6 million, which was offset by cash provided by operations of approximately $27.5 million. Cash decreased by $28.1 million, to $62.9 million, during the thirty-nine weeks ended January 23, 2009 due primarily to the repurchase of approximately $60.2 million principal value of our Convertible Notes at a purchase price of approximately $48.5 million, which was offset by the increase in cash provided by operations of $18.3 million and proceeds from stock option exercises of $4.3 million.

Net cash used in investing activities during the thirty-nine weeks ended January 22, 2010 increased by approximately $2.1 million as compared to the thirty-nine weeks ended January 23, 2009, primarily due to increases in investment in property and equipment and intellectual property. We have invested $2.6 million in property and equipment during the thirty-nine weeks ended January 22, 2010. We estimate a total investment in property and equipment of approximately $4.4 million for fiscal year 2010, compared to $2.7 million in the prior fiscal year. Planned investment in fiscal year 2010 in property and equipment consists primarily of $2.4 million of computers and software and $2.0 million of manufacturing and test equipment, to improve business infrastructure and research capabilities. We have invested $0.9 million in intellectual property for the thirty-nine weeks ended January 22, 2010 which was related to licensing of selected patents of third parties pertaining to seizure detection and prediction. Planned investment in intellectual property in fiscal year 2010 is approximately $2.0 million.

Net cash used in financing activities during the thirty-nine weeks ended January 22, 2010 decreased by approximately $9.4 million as compared to the thirty-nine weeks ended January 23, 2009. The primary reasons for the decrease were decreased repurchases of our Convertible Notes, offset by a decrease in proceeds from stock option exercises. During the thirty-nine weeks ended January 22, 2010, we repurchased approximately $39.9 million of aggregate principal amount of our Convertible Notes at a purchase price of approximately $36.3 million. During the thirty-nine weeks ended January 23, 2009, we repurchased approximately $60.2 million of aggregate principal amount of our Convertible Notes at a purchase price of approximately $48.5 million. Cash provided by the proceeds from stock option exercises during the thirty-nine weeks ended January 22, 2010 was $0.9 million compared to approximately $4.3 million for the thirty-nine weeks ended January 23, 2009.

During the thirty-nine weeks ended January 22, 2010, we repurchased approximately $39.9 million of aggregate principal amount of our Convertible Notes in privately-negotiated transactions at a purchase price of approximately $36.3 million for a favorable cash impact of $3.6 million. As a result of the purchases, we wrote off approximately $0.6 million in unamortized bond issue costs for a gain on early extinguishment of debt of approximately $3.0 million. During the thirty-nine weeks ended January 23, 2009, we repurchased approximately $60.2 million aggregate principal amount of our Convertible Notes in privately-negotiated transactions at a purchase price of approximately $48.5 million for a favorable cash impact of approximately $11.6 million. As a result of the purchases, we wrote off approximately $1.2 million in unamortized bond issue costs for a net gain on early extinguishment of debt of approximately $10.4 million.

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