UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 19, 2005
Kensey Nash Corporation
(Exact name of registrant as specified in its charter)
Delaware 0-27120 36-3316412
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Identification No.)
Marsh Creek Corporate Center, 55 East Uwchlan Avenue, Exton, Pennsylvania 19341
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (610) 524-0188
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
The information in this Form 8-K (including the exhibit hereto) shall
not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated
by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such a filing.
On January 19, 2005, we announced our results of operations and
financial position as of and for the three and six month periods ended
December 31, 2004. The press release is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KENSEY NASH CORPORATION
By: /S/ Wendy F. DiCicco
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Wendy F. DiCicco, CPA
Chief Financial Officer
Dated: January 19, 2005
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Exhibit 99.1
FOR IMMEDIATE RELEASE
---------------------
CONTACT:
Joseph W. Kaufmann
President and Chief Executive Officer
(610) 524-0188
KENSEY NASH REPORTS BETTER THAN EXPECTED SECOND QUARTER EPS OF $0.27,
AN INCREASE OF 18% OVER PRIOR YEAR PERIOD
-Net Sales Increases 27% Over Prior Year Period-
EXTON, PA, January 19, 2004 -- Kensey Nash Corporation (Nasdaq: KNSY) today
reported earnings per share of $0.27 for its second fiscal quarter of 2005,
ahead of its previous guidance of $0.25 to $0.26 per share. Net sales increased
27% over the prior year comparable period.
Second Quarter Results. Total revenues were $15.2 million for the second fiscal
quarter compared to $13.7 million in the prior year period, an increase of 11%.
Net sales increased 27% to $10.2 million from $8.0 million in the comparable
quarter of the prior fiscal year, primarily due to sales of spine related
products. Net income of $3.3 million, or $0.27 per share, for the second quarter
of fiscal 2005 increased 18% over the previous year comparable period net income
of $2.8 million, or $0.23 per share.
Royalty income of $5.0 million increased 7% sequentially and included $4.5
million in Angio-Seal(TM) royalties and $519,000 in royalties from Orthovita
(Nasdaq: VITA). The Angio-Seal royalty of $4.5 million represents an increase of
approximately 21% over the prior year quarter after adjustment for the royalty
rate decline from 9% to 6%, a 33% change, which occurred in April 2004. In
addition, Kensey Nash's new source of royalty income from Orthovita helped to
offset the impact of the decline in the Angio-Seal royalty rate. With launches
by Orthovita of co-developed products continuing, on-going strength of
Angio-Seal end-user sales, and other sources of royalty income in progress, the
Company expects royalty income to increase going forward.
As of December 31, 2004, the Company had cash and investments of $52.7 million,
total assets of $102.6 million and no debt. During the quarter, the Company
generated cash from operations of $2.9 million offset primarily by cash used for
share repurchases totaling $4.5 million and capital spending of $3.1 million,
including construction costs of our new facility.
The following table summarizes the results for the Company for the three months
ended December 31, 2004 compared to the three months ended December 31, 2003:
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Three months Three months
ended ended Percentage
($ millions, except per share data) December 31, 2004 December 31, 2003 Change
- ----------------------------------- ------------------------- ------------------------ -----------------
Net Sales $10.2 $8.0 27%
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Royalty Income $5.0 $5.6 (10%)
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Total Revenues $15.2 $13.7 11%
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Income from Operations $4.4 $3.9 14%
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Earnings Per Share $0.27 $0.23 18%
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Year-to-Date Results. Total revenues for the six months ended December 31, 2004
increased 16% to $30.3 million compared to $26.1 million in the prior year
period. Net sales increased 32% to $20.3 million from $15.4 million in the
comparable six months of the prior fiscal year. Net income for the six months
increased 22% to $6.4 million, or $0.53 per share, compared to $5.3 million, or
$0.43 per share, for the prior year period.
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The following table summarizes the results for the Company for the six months
ended December 31, 2004 compared to the six months ended December 31, 2003:
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($ millions, except per share data) Six months ended Six months ended Percentage
December 31, 2004 December 31, 2003 Change
- ----------------------------------- ------------------------- ------------------------ -----------------
Net Sales $20.3 $15.4 32%
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Royalty Income $9.7 $10.4 (7%)
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Total Revenues $30.3 $26.1 16%
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Income from Operations $8.6 $6.9 25%
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Earnings Per Share $0.53 $0.43 23%
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CEO Comments on Results. "Our second quarter results exceeded our expectations,"
commented Joseph W. Kaufmann, President and CEO of Kensey Nash Corporation.
"Biomaterials products showed strong growth year over year at 26% for our second
quarter. Sales to Orthovita of VITOSS(R) FOAM products were $2.4 million for our
second fiscal quarter 2005, a 3% increase over our first fiscal quarter,
reflecting strong and consistent post launch end-user sales by Orthovita.
Angio-Seal component sales to St. Jude Medical of $3.9 million increased 24%
over the prior year quarter. Sales of sports medicine products were $3.0
million, down 7% from our first fiscal quarter, as expected," he added. "Our
biomaterials business continues to expand as we develop and enhance our
biomaterials technologies. We are especially pleased to see the 9% sequential
growth in Angio-Seal royalty income during the quarter as St. Jude Medical
continues to demonstrate their market leadership in vascular closure devices,"
Mr. Kaufmann stated.
TriActiv Update. "We are very excited about our planned US launch of the
TriActiv. While we are awaiting FDA clearance to begin marketing, we have
expanded our US sales organization, completed our initial sales training program
and will be ready to launch once approval is obtained. When we receive FDA
approval we will provide further TriActiv sales guidance for fiscal 2005,"
commented Mr. Kaufmann. "Meanwhile, our development team continues to make
significant progress toward the next generation products in the TriActiv product
platform. We are building a foundation that will serve our company for many
years to come," he concluded.
Third Quarter and Fiscal Year Guidance. For the third quarter, guidance for
earnings is $0.30 to $0.31 per share, an increase of 7% to 11% over the prior
year comparable period. Our projections for total revenue are $16.0 to $16.3
million, including forecasts for net sales of $10.6 to $10.8 million and royalty
income of $5.4 to $5.5 million. For the fiscal year 2005, the Company continues
to estimate earnings per share of $1.18 to $1.21. Total fiscal year revenues are
currently estimated to be in a range of $66 to $69 million, an approximate
increase of 13% to 19% over the previous fiscal year. Included in this estimate
are net sales of $45 to $47 million and royalties of approximately $21 to $22
million.
Share Repurchase. During the second fiscal quarter 2005, the Company repurchased
174,867 shares for approximately $4.5 million. These shares were part of the
previously authorized and announced share repurchase program, under which
approximately 59,000 shares remain authorized for repurchase.
Conference Call and Webcast. The Company will be holding a conference call to
discuss the first quarter earnings results on Thursday, January 20, 2004 at
11:00 AM eastern time. A live webcast of the conference call will be broadcast.
Please visit the investor relations page at www.kenseynash.com for the link. To
participate in the conference call, interested parties may call 612-332-0802. A
replay of the call will also be available starting January 20, 2004 at 2:30 PM
eastern time until Tuesday, January 25, 2004 at midnight eastern time by calling
800-475-6701, access code 765129.
About Kensey Nash Corporation. Kensey Nash Corporation is a leading developer
and manufacturer of absorbable biomaterials-based products with applications in
the cardiology, orthopaedics, spine, drug and biologics delivery,
periodontal/dental, surgical and wound care markets. The Company was a pioneer
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in the field of arterial puncture closure, as the inventor and developer of the
Angio-Seal(R) Vascular Closure Device. Angio-Seal is licensed to St. Jude
Medical, Inc. The Company's TriActiv(R) Balloon Protected Flush Extraction
System for the treatment of saphenous vein graft disease is commercialized in
the European Union. The Company has submitted an application for 510(k)
clearance for its TriActiv(R) System to the U.S. Food and Drug Administration,
following the completion of a major clinical study.
Cautionary Note for Forward Looking Statements. This press release contains
forward-looking statements that reflect the Company's current expectations about
its prospects and opportunities, including, without limitation, the revenue and
earnings guidance provided by the Company for its third quarter and fiscal year
2005. The Company tried to identify these forward looking statements by using
words such as "expects," "anticipates," "estimates," "plans," "will,"
"forecasts," "guidance," or similar expressions, but these words are not the
exclusive means for identifying such statements. The Company cautions that a
number of risks, uncertainties, and other important factors could cause the
Company's actual results to differ materially from those in the forward-looking
statements including, without limitation, St. Jude Medical's success in
marketing the Angio-Seal(TM) device, demand for and the Company's ability to
develop and manufacture biomaterial products, including Angio-Seal(TM)
components, clinical, sales and marketing success of the TriActiv(R) System,
additional regulatory approvals, and competition from other technologies in the
marketplace. For a more detailed discussion of these and other factors, please
see the Company's SEC filings. Except as expressly required by the federal
securities laws, the Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, changed
circumstances or future events or for any other reason.
The Company also cautions that results of operations in any past period should
not be considered indicative of the results to be expected for future periods.
Fluctuations in operating results may also result in fluctuations in the price
of the Common Stock.
-FINANCIAL INFORMATION TO FOLLOW-
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