ARDEN HILLS, Minn., Feb. 24, 2020 (GLOBE NEWSWIRE) — IntriCon Corporation (NASDAQ: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature body-worn devices, today announced financial results for its fourth quarter and year ended December 31, 2019.
Full Year 2019 Financial Highlights:Revenue of $113.5 millionRevenue from largest medical customer increased 5% year-over-yearMedical coil revenue increased 82% year-over-yearGross margin of 27.3%Net loss per diluted share of $0.43 versus net income of $0.64 per diluted share in the prior yearFourth Quarter 2019 Financial Highlights:Revenue of $27.7 millionRevenue from largest medical customer increased 1% year-over-yearGross margin of 26.9%Net income per diluted share of $0.08 versus net income of $0.09 per diluted share in the prior year“In 2019, our team committed to continuing to meet the volume demands of our key customers and partners, while pursuing new business opportunities that could best leverage our core competencies to accelerate future growth and diversify our revenue base. We made meaningful progress throughout the year that ultimately has enabled us to enter 2020 focused on what we do best – serving as a joint development manufacturer to deliver complex micro-miniature devices requiring specialized design expertise and high production volumes,” said Mark Gorder, president and chief executive officer of IntriCon.“We continue to see meaningful revenue contribution from our long-standing relationship with our largest customer Medtronic despite the stern competitive pressures they are facing domestically. We are also especially encouraged by opportunities we have identified to expand our medical business into other market segments that can significantly leverage our microelectronics, medical coil and specialty molding expertise. Similarly, we have identified new potential partnerships that we believe will position us as a leading supplier in the much-anticipated emergence of over-the-counter hearing aid sales. In order to concentrate our resources on this opportunity, we have decided to pivot our direct-to-end-consumer initiatives through Hearing Help Express entirely towards supporting product development in order to best capture the near-term benefits we see through an indirect-to-end consumer approach.”Fourth Quarter 2019 Financial Results
For the 2019 fourth quarter, the company reported net revenue of $27.7 million versus $30.4 million in the comparable prior-year period.Revenue in IntriCon’s Medical business in the fourth quarter of 2019 was $21.3 million, an increase from $20.2 million in the comparable prior-year period. The year over year increase was driven primarily by strong medical coil sales. Hearing Health revenue was $4.9 million in the fourth quarter of 2019 compared to $8.3 million in the prior-year fourth quarter. Revenue decline during the fourth quarter was largely attributed to the anticipated restructuring activities within a large insurance customer’s hearing health business, as they pivoted towards a more traditional “brick-and-mortar” approach in the second half of 2019 that no longer aligned with IntriCon’s partnership strategy to reach the end customer. In addition, as anticipated the company experienced a decline in its legacy OEM business.Gross margin in the fourth quarter of 2019 was 26.9%, down from 29.9% in the prior-year fourth quarter. Gross margins continued to be constrained by ongoing validation and qualification expense and excess capacity related to the recent manufacturing expansion to meet the anticipated higher volume requirements of its existing and future customers.Operating expenses for the fourth quarter were $6.7 million, compared to $7.7 million in the comparable prior-year period. The decrease was driven by a substantial reduction in advertising expense at Hearing Help Express.The company posted net income of approximately $768,000 or $0.08 per diluted share in the fourth quarter of 2019, versus net income of approximately $868,000, or $0.09 per diluted share, for the 2018 fourth quarter.Full Year 2019 Financial Results
For the full year ended December 31, 2019, IntriCon reported revenue of $113.5 million, relativity flat from $113.9 million in 2018. Revenue attributable to the company’s Medical business was $82.1 million, an increase from $75.6 million in the comparable prior-year period. Hearing Health revenue was $24.9 million for the full year 2019 compared to $31.1 million in the prior year.Gross margin was 27.3%, down from 31.8% in the prior year. The decrease in margin was primarily due to excess capacity related to the manufacturing expansion to meet the anticipated higher volume requirements of the company’s existing and future customers.Operating expenses were $33.0 million, compared to $27.9 million in the prior year. The increase is a result of $3.8 million in impairments as well as higher administrative costs.Net loss attributable to shareholders was $3.8 million, or $0.43 per diluted share, versus net income of $5.5 million, or $0.64 per diluted share, in 2018.Guidance for Full Year 2020
The company expects 2020 revenue to range between $110 million to $114 million. Gross margin for the 2020 full year is expected to be approximately 26% to 27%. The company anticipates a more tempered diabetes business in 2020 due to domestic competitive pressures facing its largest customer, and continued diversification into other medical markets. In the Hearing Health business, without definitive timing on the finalization of the pending OTC hearing aid regulation, the company is considering minimal 2020 financial impact from this channel.Conference Call
IntriCon’s management team will hold a conference call today, Monday, February 24, 2020, beginning at 4:00 p.m. CT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by dialing (866) 795-7248 for domestic callers or (470) 495-9160 for international callers, using conference ID: 2652858. A live and archived webcast will be available on the “Investors” sections of the company’s website at: www.IntriCon.com.Forward-Looking Statements
Statements made in this release and in IntriCon’s other public filings and releases that are not historical facts or that include forward-looking terminology, including estimates of future results, are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be affected by known and unknown risks, uncertainties and other factors that are beyond IntriCon’s control, and may cause IntriCon’s actual results, performance or achievements to differ materially from the results, performance and achievements expressed or implied in the forward-looking statements. These risks, uncertainties and other factors are detailed from time to time in the company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2018. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.About IntriCon Corporation
Headquartered in Arden Hills, Minn., IntriCon Corporation designs, develops and manufactures miniature and micro-miniature body-worn devices. These advanced products help medical, healthcare and professional communications companies meet the rising demand for smaller, more intelligent and better-connected devices. IntriCon has facilities in the United States, Asia, and Europe. The company’s common stock trades under the symbol “IIN” on the NASDAQ Global Market. For more information about IntriCon, visit www.intricon.com.Investor Contact
Leigh Salvo
(415) 937-5404
[email protected]
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