IIN - Earnings call transcript Q3 2021

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Operator

Good day and thank you for standing by. And welcome to the IntriCon Corporation Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to turn the call over to your speaker, Leigh Salvo. ahead. go Please

Leigh Salvo

Operator. Thank you,

the begin, changes with I call preface we subject based like certain IntriCon's assumptions management and circumstances. would customary Safe remarks are on are the statements conference uncertainty statements. our estimates Harbor and forward-looking of and Before to These to current in statement. contains Today’s

today’s materially reliance statements. Actual forward-looking these you from expectations Given the these uncertainties, should on not call. contained in may place vary undue results

a the SEC. most to risks quarter please third of on of uncertainties Form and For associated respectively over the Risk business, CEO, a call description list performance. reports our and and I for refer Factors with would IntriCon’s With turn and with review the quarterly now XX-K Form section like the company’s recent the to of to our XX-Q Longval, that, Scott annual

Scott Longval

Thank you, we afternoon, everyone today. us appreciate joining Leigh. Good

of for with the Director Financial call October the years finance her Interim me as worked Chief XXXX. company’s Officer Lutgen, who the our and the a to side of into utmost I Finance, CFO. On confidence stepped XX, along nearly in of for Treasurer have ability role conduct Annalee and effective is current we department a guide Annalee permanent search the XX have

total quarter Turning XX% to our third record delivered revenues increasing with approximately a quarter revenue results, IntriCon new year-over-year.

catalysts that on We also are horizon, exciting market for progress the across very meaningful multiple accelerated opportunities. saw several toward tracking we growth

be of challenges meet in and business, supply and to we coming growth the options the successful pandemic in for to accelerated and labor customers our of the related order year. increasing manufacturing impact constraints While to continued these implement chain demands plans to navigating in experience our we continue identify shortages, have on

in we health and reminder, surgical next to a assemblies to take customers interventional the cover catheter markets. represented each over the revenue third international the recent financials strong of in of Group the business then, and of And several Advanced our quarter launches markets. in over These the market, to contribution our diabetes, third in XX% contributed approval our launches, Diabetes turn the in expectation components including are the call our XX% few primarily to cover over the more total navigation, the in for with XXXG attributable product number those I'll past in with of technology markets a of platforms U.S. XXXG have quarters, MiniMed MiniMed Medtronic growth to the to XX% same sales I'd XXXX Sensor. our and results Annalee hearing the like highlights for launch into Micro and sequentially, to certain Medtronic's of forthcoming continued Guardian Medtronic updates and detail. from X launch integrated quarter, the and Starting device have the minutes success global and the diabetes Medtronic Medtronic As of the

XXXX over encouraged on one-year well time world opportunity patients Not of that XXXG additional range and for patients glycemic and ages. recent consensus pediatric benefits X. system results potential the especially Sensor the with its this for validates its clinical open only are control that for does further up clinical system Medtronic’s by using Guardian that market announcement all MiniMed the real We guidelines adolescent the data achieved surpassed

of products in global their are proud market. this advanced We like to to be the choice partner delivering

More alternatives to meet third ahead XX% catheters we're quarter up navigation, product medical additional capacity the of year-over-year, from second business. launch. of coil to strength and developed our in and on We of navigation million, half, planned specifically, interventional portion continued sequentially commercial a up coil million, future constraints confident QX the the $X.X Japan Emerald provide new improvement, customer second to customer which of business in our best business then as with flare Olympics, will Interventional surgical lighter related operations. us customers, pursuing catheter also third year-over-year chain experienced we're This XX% surgical and to $X XXXX. partially Medical further existing the the the growth. XXXX. our expanded up build business quarter the experienced demand manufactured to part in several production through a some third progressed was as demand following XX% that the up line enable strong meet Medical in of well to quarter Turning a supply our as opportunities related first from a quarter, timelines. and will EMS that XX% includes Services continue ramped limited revenue we quarter over but which around and due totaled our actively COVID Revenue time decline

catheters In we innovation where in adoption microcoils opportunity FDA interventional further by well a manufactured and collaborative enterprise catheters a upside continued potential summary, significant pending lead of XXXX. expect of expansion in there's are to differentiation. these will complex our and products capabilities meaningful We international suited markets, to and drive believe with submission EMS growth for

FDA were to the as over significantly declined years more hearing or Americans audiologist, year, of to with this less it mild older a this orders get quarters. at a XX in million believe supporter proposal, hearing aid in Last recoup addition moderate to the has alternatives, major XX access XX% Turning market, year-over-year, related and largely Americans an hearing establish would fitting, revenues be to expect to contributed in they access IntriCon anticipated for aids over several but also would XX%. highly hearing cost partnerships suffering to the loss. the chain are hearing A approximately other expensive have prescription month, accessible firmware, hardware, prior lower securing third the is and to a where support. approval. been few proposal, its from revenues quarter due this to year-to-date from broader as public category previously age There perceived and required Health, market for for that Under revenue support bipartisan a backend widespread needed longstanding for has much for impacts the from for up priority very we to been in the adjustments decline maintenance. our identifying counter optimistic participants we we with the next benefit Supply visits to IntriCon and can open market software proposal to to timing offers regulatory aids. the significantly estimated the Hearing published a the new loss

have of better this with emerging participants We market. a positioned never partner been to wide range in

software to With hearing remain ecosystem we this support anticipated a advance been earlier care proprietary the As the on further enabling part of our completed, customer preparation FDA to of ahead for our allows the summative OTC commenced ruling, we received positioning aids. OTC progress. usability this to an trial complete clinical software, which a validation success us a and milestone, support final track our that and in clinical to with self-fitting had of of experience market, year, notice September trial to

technology. HearX to widespread and the additional are moves the space. continues option, are our of as HearX In our excitement expand we software the anticipated parallel, OTC with market driving an met demand for ecosystem towards and as with hardware, value of enter seeing encouragingly, opportunities program pilot that partners firmware has we from Our been with increased care see they

work deal we choice. We of done market have new to position development tremendous joint of the and confidence in a have and the potential great of IntriCon as this manufacture

final the serve. demand markets. we the across the quarter enter of positioned than high of our all I believe ever Customer are better we As markets year, within core we remains

anticipate remainder are have chain the that secure that quarter, the to shortages, taking created labor expansion challenges, to third I'm we enter continue Our price sourcing, persist, constrain of will and dual a are increases. these customer that may steps and we in beyond. confident XXXX. our our as emerging at we and That minimize through number inventory growth and the the year the the levels, short-term, of fractured we said, supply increasing margin impacted which will margins existing In in short-term in significant including least and inefficiencies partnerships drive XXXX catalysts do

efficiencies, confident that I'm in macro improvement. believe We're will chain we greater also operational time, are we summary, taking mitigate reach stabilizes, even over environment greater supply as challenges transitory. margin and our resulting over the employees newer time, trained In labor to as to can immediate direct the We these and line experience. efficiency, gain are impact achieve action staffing and

it over team Importantly, time now our perfectly Annalee. execution and assembled. business Annalee? With challenging turn I'll throughout growth an continued high the of resilience exemplifies that, the consistent we have level and to undoubtedly

Annalee Lutgen

Scott. you, Thank

our quarter, use Now to today. a most turning table GAAP to and the measures of non-GAAP recall directly to the the picture the results, the accompanying in our we in first of press transformation. comparable issued adopted growth reporting Reconciliations provided financial are provide we release clear

catheter versus increase period, per diluted net diabetes, to the as prior revenues period. XX% million, Surgical year-over-year Interventional Medtronic period third increase of driver was in noted, increased earlier a Balloon share by the production States. year million XXXG second quarter the an revenue the quarter net prior increases health MiniMed was year. markets, quarter. the $X.X The $X.XX the attributable and in comparable for quarter adjusted $X.XX increase in income specific the expansion net faced the per over we XX.X% quarter. quarter of Scott $X.X United interventional For diluted the company primarily million third million, of XX% million $XX.X the primary QX. the XX% we navigation third XX% increase addressed year manufactured year labor and prior sequentially The early $XX.X our have driven reported to from of XXXX, success $XX the $X.X of by in year was the the of million, was XXXG growth by The $X.XX our net XX% an over in Diabetes In $X primarily per $X.X the in constraints, XXXX. through income driven income input third primarily year net the and versus $X.XX to the year compared was launch $X.X decline chain share income Non-GAAP in $XXX,XXX, certain $XXX,XXX EMS. share quarter revenue continued business, surgical period. period. the Medtronic’s revenue over XXXX increased Chocolate of diluted GAAP supply of total the million, or international was challenges share continued this prior of market. as diluted was added from worked or was in or prior to market navigation and per million, This revenue hearing year MiniMed capacity in in in prior which or mostly million in of by prior third catheter driven

anticipate As to help orders rebound remain quarter. XXXX we continue fourth hearing in strong, to the

compared in for both part year The Third quarter for XX.X% current the mix. in and third gross prior to product to supply year costs expenses higher were the the due quarter period. lower labor comparable at were and margins periods. was Operating constraints, flat million prior margin XX.X% chain $X.X

investments. During reduced was third earn-out and increased which marketing offset liability by quarter, XXXX business the $XXX,XXX, EMS the we development by

attributable X.X As and XX, XXXX, of ease our of to cash operating as COVID-XX million, with growth higher cash positive year-to-date of $XX.X $XX.X compared million and associated million from XX, of September flow restriction. December business primarily we cash operations earnings with of had to XXXX, investments

now outlook open to anticipate lower confident XX%. XX% the now representing raising our of year-to-date With full we're to our end year-over-year and to of revenue growth $XXX year, to range to I questions. our Scott and the for would performance, strong the Turning from call for Operator? million $XXX in our that, XXXX given guidance million like

Operator

Stifel. Instructions] Block Thank line you. We have Jon question [Operator of from the a with

Tom Stephan

to up And it this guidance Tom million it were from the can Medtronic think guidance, in I Stephan your relates U.S. Hi, like strong it as the off into million pipeline results on is start XXX XXXX. seems I to you're to the with of for diabetes, diabetes the questions. able really midpoint, If potentially initial despite at for Thanks quarter. was the get slipping XXX Jon.

speak as that could the maybe diabetes, for XXXX to trend into maybe Scott, you, XXXX potentially line So XH in those be events? approvals does favorably

Scott Longval

gained we've third that, into think business momentum We strong. diabetes quarter Yes. obviously, that was coming the in the the

within about Obviously, it's XXX what seeing which on We they're little real business, internationally. compared very lot that data see positive, some from continue we of to and with the announcements the with of the XXX strengthening more the in is terms some that they've data, a had recently, the attributed adults, then a the both of clinical of world to talked bit adolescents. success to

momentum, X into brings things Sensor, So think a if look the XXXX approval we there's a we lights, think customer tailwinds. And as here to some the about Guardian lot and that think in U.S., gain there's we out business. of they diabetes lot of then We look good also to think with beyond. we happening as

Tom Stephan

published, thanks. here, hearing partnerships. or today describe landscape accelerated And the obviously just since maybe they entered then, would even with if and hearing, potential I Great, How partners pivot couple more to potential on proposed OTC can your the stages? were you a rules final discussions

Scott Longval

Yes.

evolve. conjunction think those of those which to down think with we're talked both putting hear partners were and in to the OTC in as of experts, down the far pretty probably path. excited scale for this continue and those the potential groups host they the working other in a be those We meet discussions plans they with detail the with last are mentioned, ability quarters, the most very of the regulations. about that kind at pilots we've relationships. care, effectively that will consumer market as advantageous. market, working, with this But path We're been point doing look enter of well several we're the business today have continue partners, final -- to the We've discussions we've of that So together

I be regulation, and more draft So partners. excited say just since there's activity would guidance working to then, with the And multiple OTC there. issued, was been more

effort to is to is have in our where this to want IntriCon to spend and that time terms move that disciplined we partners so forward thoughtful be supporting. the and going of we're ensure And being

have So consumers, that's ability for us. that scale expertise for. the the we think, again opportunity continues directly seen, we're those that to the tremendous again, scale partners and what on have the harbor based engaging financial market are looking to traits And wherewithal to those we've this

Tom Stephan

sense that you great great. partnerships to can the follow up hear. in just forward or things can wins we for go? I to And question, types think I a far will of get Thanks. getting updates pace. it'd these may can what to to be greater OTC and be helpful, squeeze a a as Okay, disclosures, street move at That's just convey what now as if as or

Scott Longval

difficult Yes, for thank one us. you. That's a

partners, in As a they're you of we manner put do confidential know, we're to with together. business plans it a lot their working as and working

be continue think we'll give to to and occur. detail we progressing, comments the after specifics. able of general a the and actually are we're in kind insights be So programs, terms them won't able those hopefully of of in give in greater we how to said, there relationships being lot too of talk terms out relationships until launches marking That with those much probably

Operator

queue. in would the further like remarks. turn I'm for you. showing questions any Thank final I Scott to the call And to back any not

Securities. Kyle with we jumped more Sorry, one got in just queue. that Bauser the Colliers

Kyle Bauser

So, just quick a follow-up.

just through some So the point. January period milestones FDC and self-fitting situation on able the forward. the for current sort think And on Or with really the fact that just steps to data just see the a next to that trying guidelines, in to public understand it where the walk more you've going great would release, the at you trial? submitted the to what the envision readout? comment do cadence application of ends of FDA releasing press jive So update trial, you are? be to I being any kind of it's press regarding nicely move you of Can of some

Scott Longval

Thanks, Kyle.

currently in we've satisfy as the the patients So that we statistical roughly kind XXX have past, signed talked about we are XX need of up. over to in in clinical, order goal,

much at we want at too at release, say, the data to continue we we'll will some terms the some to public I much submit to to in other is communication clinical depending goal through FDA. details. the point, and and fact the have the submitted have the have of of on how But would expect obviously, Our that to we the reads, FDA, push what application which don't the that than include point

Kyle Bauser

Got even the it it. But it more like, sounds public period, after a final. become comment couple the for takes to rule months

of good a on that ruling. pretty Sounds had like Is kind the final trial fair? you're that with a pace

Scott Longval

Yes. Kyle it timed And sure we make from, right. trying we that's what correctly, that to talked about

October through comment And XX in it then final effect the a look, you period will days. will formal on written released own XX They will going days rule a was we be the There'll draft FDA. -- if of which have go comments So our have and time for be XX. period after. to the that into

looking I of in regardless, lot was maybe of part the we last is look key to several included increase third U.S. IntriCon, at that So was lot most over think to think the topics end guidance, the a that you of second market focused we the the quarter. draft have But early the if likely years the we're of there in benefits encompassed. were on a penetration been at that what towards quarter,

estimation, So will that devices moderate put to of able was to And confirmed which of output the that kind limits DB makeup, own pool was some people with out having largest be the the individuals mild self-fitting moderate those my their OTC the regulatory include have and of there. Being that classifier they directed. critical. in

the of helped think kind a the needs technology, And those performance and in moderate that meet software hardware, build to able be firmware to IntriCon's of around of other acoustical thing is both going some hearing that moat the electro the we're requirements. know I OTC we loss. So

draft the a that performed was we that of hearing in strong it of FDA they devices think the puts put very aid. had very position. they So would to level, clear, types at ones an out, as be a when thoughtful guidance OTC this us high terms And were very those classify that in

As market, in -- the laid number them out FDA the out personal last I'll cut the acoustical of to requirements. the amplifiers are audio their years, what that over on going performance call there's for sound of several a that's mustard terms not we've cheap, is seen electronic

that a and the position, us going about care U.S. we as several we're think going all in really really start market in a evolve I be puts for next So support be to to strong senior what's to think years. the health very exciting XXXX, over how engine the

Kyle Bauser

how curious, XX helpful. you XX the just Thank of how Got I’m then, EMS best, rate it. mean, from you. transaction seen just maybe most much That's trying to the do we would that sense regarding transactions probably make that runway Appreciate the in there? a lastly, that have size What's that. months. perspective, medium-term just is last one market? And I business, understand accretive growth we've to

Scott Longval

laid do really out, in that out over But we're And a fourth quarter COVID, raw saw quarters for was here flare by we materials little that quarter. slowed we've pockets for driven supply some longer longer meaningful several that constraints And we the about business as can that with working that on, through. of current in we're have in the So business some of some ups business the customers business Asia. in excited see can we're the catheter hyper third last over growth coming programs sensor of the provide development, very the that interventional we're the and term, go of medical back only convergence in side are working in that we with not revenue where term, think 'XX. coil contributions that doing some side. on we But that that with a half work of bit

to lot doctors a and catheters be to greater sensors of can medicine the take readings and in We're a for information putting nurses. position good there. going of biometric to kind and advantage a allow of think we're the that. So is that moving And provide there's we opportunities that

Operator

you. don't Scott. And back questions. additional Thank the any turning right. you, to All call I see

Scott Longval

to that great Excellent. update to of and excited I today just us and like to giving spending the have we group about we IntriCon. an thank accordingly. very with time continuing safe -- everybody update opportunities built that the business look have evening. the a front We're Stay some in for forward

Operator

And today's with thank gentlemen, that, program. ladies you for participating and in

You may now disconnect. Have a day. wonderful

Intricon (IIN) 9 Nov 212021 Q3 Earnings call transcript