On November 6, 2024, Surmodics Inc (SRDX, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year ended September 30, 2024. Surmodics Inc, a provider of surface modification and in vitro diagnostic technologies to the healthcare industry, reported a notable increase in revenue, surpassing analyst estimates, despite facing a net loss.
Company Overview
Surmodics Inc is dedicated to enhancing the treatment and detection of diseases through its innovative technologies. The company operates in two segments: the Medical Device unit, which focuses on performance coatings and surface modification technologies, and the In Vitro Diagnostics unit, which manufactures components for diagnostic tests. The majority of its revenue is derived from the Medical Device segment.
Fourth Quarter Financial Performance
Surmodics Inc reported a total revenue of $33.2 million for the fourth quarter of fiscal 2024, marking a 19% increase year-over-year and exceeding the analyst estimate of $30.40 million. This growth was primarily driven by a 22% increase in Medical Device revenue, which reached $25.8 million, and an 8% increase in In Vitro Diagnostics revenue, totaling $7.5 million. However, the company reported a GAAP net loss of $(3.4) million, or $(0.24) per diluted share, compared to a net income of $6.7 million in the same period last year.
Fiscal Year 2024 Financial Summary
For the fiscal year 2024, Surmodics Inc reported total revenue of $126.1 million, a decrease from $132.6 million in the prior year. This decline was attributed to the absence of a significant $25.0 million license fee revenue recognized in the previous year. Excluding this, the revenue increased by 17% to $121.0 million. The company faced a GAAP net loss of $(11.5) million, compared to a $(1.5) million loss in the prior year.
Key Financial Metrics and Achievements
Adjusted EBITDA for the fourth quarter was $4.4 million, up from $1.7 million in the prior-year period, indicating improved operational efficiency. The Medical Device segment saw a 39% increase in product sales, driven by the Pounce Thrombectomy Platform and SurVeil DCB. The company's performance coating royalties and license fee revenue also grew by 7%.
“We are proud to deliver a strong conclusion to fiscal 2024, with total revenue growth in the fourth quarter of 19% year-over-year fueled by impressive performance in our Medical Device segment,” said Gary Maharaj, President and CEO of Surmodics, Inc.
Balance Sheet and Cash Flow
As of September 30, 2024, Surmodics reported $40.1 million in cash and investments, with $5.0 million in outstanding borrowings on its revolving credit facility. The company generated $3.7 million in cash from operating activities during the fourth quarter, reflecting a solid cash flow position despite the net loss.
Strategic Developments and Future Outlook
Surmodics announced a definitive agreement to be acquired by GTCR LLC for $43.00 per share, valuing the company at approximately $627 million. The merger is expected to close in the second fiscal quarter of 2025, pending regulatory approval. Additionally, the company received FDA clearance for its Pounce™ XL Thrombectomy System, expanding its market reach.
Surmodics Inc's strong revenue growth and strategic advancements position it well for future success, despite current challenges. The pending acquisition by GTCR LLC is anticipated to provide further opportunities for growth and innovation in the medical devices and diagnostics industry.
Explore the complete 8-K earnings release (here) from Surmodics Inc for further details.
