Exhibit 99.1
INTRICON REPORTS 2015 SECOND-QUARTER RESULTS
Company Delivers Continued Profitability, Secures Value Hearing Health Channel Partner
ARDEN HILLS, Minn. — August 6, 2015 — IntriCon Corporation (NASDAQ: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature body-worn devices, today announced financial results for its second quarter ended June 30, 2015.
Highlights:
| • | Net sales of $17.1 million were in line with expectations and increased 3 percent sequentially; |
| • | The company continued to deliver profitability with net income of $506,000, or $0.08 per diluted share; |
| • | IntriCon’s Medtronic business posted record quarterly revenue; and, |
| • | The company entered into a two-year supply agreement with AudioNova International B.V. (AudioNova), one of Europe’s leading hearing aid providers, operating more than 1,300 retail stores in 11 countries. |
Financial Results
For the 2015 second quarter, the company reported net sales of $17.1 million, compared to $17.5 million in the prior-year period. IntriCon posted net income of $506,000, or $0.08 per diluted share, versus net income of $813,000, or $0.13 per diluted share, for the 2014 second quarter.
“We are pleased with our second-quarter performance as we continue to deliver profitability while building infrastructure required to secure high-potential growth opportunities,” said Mark S. Gorder, president and chief executive officer of IntriCon. “While our Medical business fueled the sequential revenue growth, we made significant strides in our strategy to drive business in value hearing health by solidifying yet another prominent partner, AudioNova, to deliver high-quality, low-cost hearing devices to the European market.”
Gross profit margins were 26.8 percent compared to 27.3 percent in the prior-year second quarter. The decrease was primarily due to lower overall sales volumes.
IntriCon Corporation 2015 Second-Quarter Results
August 6, 2015
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Six-Month Results
For the 2015 six-month period, IntriCon reported net sales of $33.7 million and net income of $790,000, or $0.13 per diluted share. This compares to 2014 six-month net sales of $34.8 million and net income of $1.3 million, or $0.22 per diluted share. Included in 2014 six-month results was a net loss from discontinued operations of $270,000, or $0.05 per diluted share.
Gross profit margins decreased to 26.4 percent from 27.4 percent for the prior-year, six-month period. Again, this was primarily due to the second-quarter factors detailed above.
Business Update
Hearing health sales declined 12 percent during the second quarter from the prior-year quarter, primarily due to one-time decreases in the conventional hearing health channel. This was partially offset by gains in targeted value hearing health initiatives. While hearing health sales are down from the prior year, IntriCon remains focused on building the infrastructure required to secure other notable partners in the second half of 2015 and beyond, that can benefit from the outcomes-based hearing health model we offer. The company anticipates year-over-year hearing health sales gains driven by new value hearing health programs that are anticipated to ramp in the second half of 2015.
Said Gorder, “We continue to make strides in the value hearing health market. Through our new supply agreement, AudioNova will offer technically advanced hearing devices, manufactured by IntriCon. AudioNova’s smartsound brand is based on IntriCon’s Audion™ amplifier, and offers technically advanced features at value hearing health price points. AudioNova has begun rollout of the smartsound brand in the Netherlands and intends to expand the program to other targeted European countries in the future. IntriCon expects to begin shipping product in the third quarter.
“In addition, we continue to work with the United Kingdom’s National Health Service (NHS) on product approval, and just this week we received correspondence that the NHS Audiology Supplies Group (ASG) has completed their evaluation of our products and software. While we have yet to receive formal feedback, we are pleased with how our products and software preformed during the evaluation, and are encouraged by the informal feedback. We anticipate formal feedback in the third quarter. The NHS is widely seen as the most efficient hearing aid delivery system in the world, supplying an estimated 1.4 million hearing aids annually. We believe we are well positioned to serve their needs, and we’re developing new technologies to further enhance delivery efficiencies and product standards in the future.”
IntriCon Corporation 2015 Second-Quarter Results
August 6, 2015
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Sales in IntriCon’s medical business increased 8 percent in the 2015 second quarter, primarily driven by IntriCon’s largest customer, Medtronic. Sales to Medtronic for the second quarter were at record levels. The gains were driven by the MiniLink REAL-Time Transmitter and related accessories sales, which are incorporated in Medtronic’s MiniMed 530G insulin pump and continuous glucose monitoring system. IntriCon anticipates Medtronic revenue gains throughout 2015.
Second-quarter 2015 professional audio communication sales declined 16 percent from the prior-year period. The anticipated decrease was due to the conclusion of the company’s Singapore Government contract in 2014.IntriCon will continue to leverage its core technologies in professional audio communication to support existing customers, as well as seek related hearing health and medical product opportunities.
Looking Ahead
Concluded Gorder, “I am encouraged with the progress we made in the first half of the year. We have focused a significant amount of resources advancing our technology portfolio, building our value hearing health infrastructure and securing key channel partners. With clear evidence of an emerging value hearing health market opportunity and new partnerships coming on board, coupled with our strong Medtronic business, we are well positioned for future growth. We expect our momentum to build throughout the year and are on track to achieve sequential revenue growth in the third quarter and higher sales year-over-year for 2015.”
Conference Call Today
As previously announced, the company will hold an investment community conference call today, Thursday, August 6, 2015, beginning at 4 p.m. CT. Mark Gorder, president and chief executive officer, and Scott Longval, chief financial officer, will review second-quarter performance and discuss the company’s strategies. To join the conference call, dial: 1-888-632-3384 and provide the conference ID number 7820196 to the operator.
A replay of the conference call will be available three hours after the call ends through 7:00 p.m. CT on Thursday, August 20, 2015. To access the replay, dial 1-888-203-1112 and enter passcode: 7820196.
IntriCon Corporation 2015 Second-Quarter Results
August 6, 2015
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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, visitwww.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 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, 2014. 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.
| Contacts | |
| At IntriCon: | At PadillaCRT: |
| Scott Longval, CFO | Matt Sullivan |
| 651-604-9526 | 612-455-1709 |
| slongval@intricon.com | matt.sullivan@padillacrt.com |
IntriCon Corporation 2015 Second-Quarter Results
August 6, 2015
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INTRICON CORPORATION
Consolidated Condensed Statement of Operations
(In Thousands, Except Per Share Amounts)
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| Sales, net | | $ | 17,120 | | | $ | 17,507 | | | $ | 33,722 | | | $ | 34,817 | |
| Cost of sales | | | 12,535 | | | | 12,735 | | | | 24,809 | | | | 25,272 | |
| Gross profit | | | 4,585 | | | | 4,772 | | | | 8,913 | | | | 9,545 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Sales and marketing | | | 898 | | | | 891 | | | | 1,885 | | | | 1,898 | |
| General and administrative | | | 1,733 | | | | 1,616 | | | | 3,442 | | | | 3,240 | |
| Research and development | | | 1,294 | | | | 1,148 | | | | 2,520 | | | | 2,316 | |
| Restructuring charges | | | — | | | | — | | | | — | | | | 83 | |
| Total operating expenses | | | 3,925 | | | | 3,655 | | | | 7,847 | | | | 7,537 | |
| Operating income | | | 660 | | | | 1,117 | | | | 1,066 | | | | 2,008 | |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | (89 | ) | | | (125 | ) | | | (192 | ) | | | (263 | ) |
| Other income (expense) | | | 12 | | | | (122 | ) | | | 148 | | | | (62 | ) |
Income from continuing operations before income
taxes and discontinued operations | | | 583 | | | | 870 | | | | 1,022 | | | | 1,683 | |
| | | | | | | | | | | | | | | | | |
| Income tax expense | | | 77 | | | | 57 | | | | 232 | | | | 83 | |
| Income before discontinued operations | | | 506 | | | | 813 | | | | 790 | | | | 1,600 | |
| Loss on sale of discontinued operations | | | — | | | | — | | | | — | | | | (120 | ) |
Loss from discontinued operations, net of
income taxes | | | — | | | | — | | | | — | | | | (150 | ) |
| Net income | | $ | 506 | | | $ | 813 | | | $ | 790 | | | $ | 1,330 | |
| | | | | | | | | | | | | | | | | |
| Basic income (loss) per share: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.09 | | | $ | 0.14 | | | $ | 0.14 | | | $ | 0.28 | |
| Discontinued operations | | | — | | | | — | | | | — | | | | (0.05 | ) |
| Net income per share: | | $ | 0.09 | | | $ | 0.14 | | | $ | 0.14 | | | $ | 0.23 | |
| | | | | | | | | | | | | | | | | |
| Diluted income (loss) per share: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.08 | | | $ | 0.13 | | | $ | 0.13 | | | $ | 0.27 | |
| Discontinued operations | | | — | | | | | | | | — | | | | (0.05 | ) |
| Net income per share: | | $ | 0.08 | | | $ | 0.13 | | | $ | 0.13 | | | $ | 0.22 | |
| | | | | | | | | | | | | | | | | |
| Average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 5,856 | | | | 5,780 | | | | 5,848 | | | | 5,754 | |
| Diluted | | | 6,242 | | | | 6,081 | | | | 6,229 | | | | 5,973 | |
IntriCon Corporation 2015 Second-Quarter Results
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INTRICON CORPORATION
Consolidated Condensed Balance Sheets
(In Thousands, Except Per Share Amounts)
| | | June 30, | | | December 31, | |
| | | 2015 | | | 2014 | |
| | | (Unaudited) | | | | |
| Current assets: | | | | | | | | |
| Cash | | $ | 273 | | | $ | 328 | |
| Restricted cash | | | 612 | | | | 640 | |
Accounts receivable, less allowance for doubtful accounts of $115 at
June 30, 2015 and $120 at December 31, 2014 | | | 7,785 | | | | 7,673 | |
| Inventories | | | 11,298 | | | | 9,983 | |
| Other current assets | | | 859 | | | | 1,013 | |
| Total current assets | | | 20,827 | | | | 19,637 | |
| | | | | | | | | |
| Machinery and equipment | | | 36,768 | | | | 35,104 | |
| Less: Accumulated depreciation | | | 31,559 | | | | 30,859 | |
| Net machinery and equipment | | | 5,209 | | | | 4,245 | |
| | | | | | | | | |
| Goodwill | | | 9,194 | | | | 9,194 | |
| Investment in partnerships | | | 332 | | | | 387 | |
| Other assets, net | | | 430 | | | | 498 | |
| Total assets | | $ | 35,992 | | | $ | 33,961 | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Checks written in excess of cash | | $ | 12 | | | $ | 516 | |
| Current maturities of long-term debt | | | 1,894 | | | | 1,886 | |
| Accounts payable | | | 6,694 | | | | 5,438 | |
| Accrued salaries, wages and commissions | | | 2,294 | | | | 2,519 | |
| Deferred gain | | | 110 | | | | 110 | |
| Other accrued liabilities | | | 1,475 | | | | 1,364 | |
| Total current liabilities | | | 12,479 | | | | 11,833 | |
| | | | | | | | | |
| Long-term debt, less current maturities | | | 5,076 | | | | 4,627 | |
| Other postretirement benefit obligations | | | 482 | | | | 485 | |
| Accrued pension liabilities | | | 685 | | | | 741 | |
| Deferred gain | | | — | | | | 55 | |
| Other long-term liabilities | | | 94 | | | | 113 | |
| Total liabilities | | | 18,816 | | | | 17,854 | |
| Commitments and contingencies | | | | | | | | |
| Shareholders’ equity: | | | | | | | | |
Common stock, $1.00 par value per share; 20,000 shares authorized; 5,864 and
5,844 shares issued and outstanding at June 30, 2015 and December 31, 2014,
respectively | | | 5,864 | | | | 5,844 | |
| Additional paid-in capital | | | 17,303 | | | | 16,939 | |
| Accumulated deficit | | | (5,484 | ) | | | (6,274 | ) |
| Accumulated other comprehensive loss | | | (507 | ) | | | (402 | ) |
| Total shareholders’ equity | | | 17,176 | | | | 16,107 | |
| Total liabilities and shareholders’ equity | | $ | 35,992 | | | $ | 33,961 | |
