SurModics Inc. (SRDX, Financial) filed Quarterly Report for the period ended 2010-03-31.
Surmodics Inc. has a market cap of $309.6 million; its shares were traded at around $17.75 with a P/E ratio of 31.2 and P/S ratio of 2.7. Surmodics Inc. had an annual average earning growth of 23.5% 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, Chuck Royce of Royce& Associates, PRIMECAP Management, Jim Simons of Renaissance Technologies LLC.
Therapeutic. Revenue in Therapeutic was $30.6 million in the first six months of fiscal 2010, a decrease of 59% compared with $75.1 million in the first six months of fiscal 2009. The decrease in total revenue reflects the recognition of revenue of approximately $45 million associated with the terminated Merck collaborative research and license agreement, which was terminated effective in the first quarter of fiscal 2009. Excluding this significant event-specific item in fiscal 2009, revenue increased $0.5 million in the first six months of fiscal 2010 compared with the comparable prior period. Therapeutic revenue is further characterized by the market-focused areas detailed above.
Other income, net. Other income was $0.6 million in the first six months of fiscal 2010, compared with $1.0 million in the first six months of fiscal 2010. Income from investments was $0.6 million, compared with $1.1 million in the prior-year period. The
As of March 31, 2010, the Company had working capital of $33.7 million, of which $19.3 million consisted of cash, cash equivalents and short-term investments. Working capital increased $4.7 million from September 30, 2009, driven principally by higher accounts receivable and prepaid balances and lower accounts payable balances. Our cash, cash equivalents and short-term and long-term investments totaled $51.8 million at March 31, 2010, an increase of $3.9 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.
In November 2007, our Board of Directors authorized the repurchase of $35.0 million of the Companys common stock in open-market transactions, private transactions, tender offers, or other transactions. The repurchase authorization does not have a fixed expiration date. During the six months ended March 31, 2010, the Company repurchased 102,533 shares for $2.0 million at an average price of $19.81 per share, leaving $5.3 million remaining available for future share repurchases under the repurchase program.
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 $4.5 million to $5.5 million; general capital expenditures in the range of $3 million to $4 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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Surmodics Inc. has a market cap of $309.6 million; its shares were traded at around $17.75 with a P/E ratio of 31.2 and P/S ratio of 2.7. Surmodics Inc. had an annual average earning growth of 23.5% 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, Chuck Royce of Royce& Associates, PRIMECAP Management, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
The Company recorded total restructuring charges of $1.3 million in connection with the fiscal 2010 reorganization. These pre-tax charges consisted of $0.8 million of severance pay and benefits expenses and $0.5 million of facility-related costs. The restructuring is expected to result in approximately $0.5 million to $1.0 million in annualized cost savings.Therapeutic. Revenue in Therapeutic was $30.6 million in the first six months of fiscal 2010, a decrease of 59% compared with $75.1 million in the first six months of fiscal 2009. The decrease in total revenue reflects the recognition of revenue of approximately $45 million associated with the terminated Merck collaborative research and license agreement, which was terminated effective in the first quarter of fiscal 2009. Excluding this significant event-specific item in fiscal 2009, revenue increased $0.5 million in the first six months of fiscal 2010 compared with the comparable prior period. Therapeutic revenue is further characterized by the market-focused areas detailed above.
Other income, net. Other income was $0.6 million in the first six months of fiscal 2010, compared with $1.0 million in the first six months of fiscal 2010. Income from investments was $0.6 million, compared with $1.1 million in the prior-year period. The
As of March 31, 2010, the Company had working capital of $33.7 million, of which $19.3 million consisted of cash, cash equivalents and short-term investments. Working capital increased $4.7 million from September 30, 2009, driven principally by higher accounts receivable and prepaid balances and lower accounts payable balances. Our cash, cash equivalents and short-term and long-term investments totaled $51.8 million at March 31, 2010, an increase of $3.9 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.
In November 2007, our Board of Directors authorized the repurchase of $35.0 million of the Companys common stock in open-market transactions, private transactions, tender offers, or other transactions. The repurchase authorization does not have a fixed expiration date. During the six months ended March 31, 2010, the Company repurchased 102,533 shares for $2.0 million at an average price of $19.81 per share, leaving $5.3 million remaining available for future share repurchases under the repurchase program.
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 $4.5 million to $5.5 million; general capital expenditures in the range of $3 million to $4 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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