Surmodics Delivers Mixed Q1 Fiscal 2025 Financial Results

Surmodics Reports First Quarter Financial Performance

Surmodics, Inc. (Nasdaq: SRDX), a respected provider of medical device technologies and in vitro diagnostics, has announced its financial results for the first quarter of the fiscal year 2025. In this quarter, which ended on December 31, 2024, Surmodics has shown some resilience in the face of challenges, reporting total revenue of $29.9 million, indicating a small decline of 2% compared to the same quarter last year.

Financial Overview for Q1 FY 2025

The first quarter of fiscal 2025 saw Surmodics generate total revenue of $29.9 million. When excluding the SurVeil™ drug-coated balloon license fee revenue, the total revenue came down to $28.7 million. This reflective of a 3% decrease compared to the prior year.
Key financial figures include:

• GAAP net loss of $(3.7) million, compared to $(0.8) million in the previous year.
• Adjusted EBITDA of $3.6 million, down from $3.9 million.
• Medical device revenue stood at $23.3 million, which is a slight dip of 1% from $23.5 million of the prior year.
• Revenue loss in In Vitro Diagnostics was recorded at 5%, dropping to $6.6 million.

Noteworthy Highlights from the Quarter

During this quarter, Surmodics was actively engaged in merger discussions with GTCR LLC, a private equity firm. On May 29, 2024, Surmodics revealed it had agreed to be acquired by GTCR at $43.00 per share, culminating in an approximate equity value of $627 million. The merger received approval from Surmodics' shareholders.

In other news, on October 1, 2024, the FDA granted 510(k) clearance for the Pounce™ XL Thrombectomy System, expanding its capabilities for clot removal in larger peripheral arteries. Additionally, early data from a registry study involving the Pounce Thrombectomy System showed promising results, indicating encouraging restoration rates for procedural flow in limb ischemia patients.

Challenges and Financial Adjustments

Gary Maharaj, President and CEO of Surmodics, acknowledged the efforts of the team during this quarter and the slight decrease in SurVeil DCB revenue. This decline was anticipated based on previous stocking shipments that had inflated numbers in previous years.

Despite the overall revenue decrease, the growth in performance coating royalties and the sales increase of the Pounce thrombectomy platform have helped stabilize the financial trajectory. However, operating costs have risen by 13% due to merger-related expenditures related to their negotiations with GTCR and the compliance efforts with the FTC.

Balance Sheet and Future Guidance

As of December 31, 2024, Surmodics reported $30.1 million in cash and investments, alongside outstanding borrowings. The management has decided not to provide financial guidance for the fiscal year 2025 due to uncertainties surrounding the impending acquisition.

Conclusion

Surmodics continues to navigate a challenging market environment while preparing for significant transitions within its corporate structure. The commitment to enhancing its product offerings, combined with a strategic focus on operational efficiency, positions the company well as it anticipates future growth and development.

Frequently Asked Questions

1. What were Surmodics' total revenues for Q1 FY 2025?

Surmodics reported total revenues of $29.9 million for the first quarter of fiscal year 2025.

2. How did Surmodics' net loss change compared to the previous year?

The company reported a net loss of $(3.7) million, compared to $(0.8) million for the same quarter last year.

3. What major agreement was announced in this quarter?

Surmodics announced an acquisition agreement with GTCR LLC for $43.00 per share.

4. What is the significance of the Pounce™ XL Thrombectomy System?

The system recently received FDA clearance, enabling it to treat larger peripheral arteries more effectively.

5. Is Surmodics providing financial guidance for FY 2025?

No, Surmodics is withholding guidance for the fiscal year due to the pending acquisition.

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