EX-99.1 2 intricon150568_ex99-1.htm PRESS RELEASE DATED FEBRUARY 17, 2015

Exhibit 99.1

 

INTRICON REPORTS 2014 FOURTH-QUARTER AND FULL-YEAR RESULTS

Revenue and Net Income Gains Cap Strongest Performance in a Decade

ARDEN HILLS, Minn. — February 17, 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 fourth quarter ended December 31, 2014.

 

Fourth-Quarter Highlights:

Net sales of $16.5 million rose 10 percent over the prior-year period;
Gross margins of 27.1 percent increased from 25.5 percent;
IntriCon achieved EPS of $0.06, up significantly from an EPS loss of $(0.25) in the prior-year period;
The company’s value hearing health business posted strong results, with revenues rising 31 percent;
The company reduced bank debt by $2.0 million from 2013 year end;
IntriCon secured CE (Conformité Européenne) Mark approval allowing it to directly pursue significant value hearing health opportunities throughout Europe; and
The company entered into a distribution agreement with the United Kingdom’s PC Werth Ltd which allows IntriCon to be a main supplier to the National Health Service (NHS) Supply Chain’s National Framework.

 

Financial Results

For the 2014 fourth quarter, the company reported net sales of $16.5 million, up from $15.0 million in the prior-year period. IntriCon posted net income of $360,000, or $0.06 per diluted share, compared to a net loss of $(1.4) million, or $(0.25) per diluted share, for the 2013 fourth quarter. Included in the 2014 fourth-quarter results was a one-time $165,000, or $0.03 per diluted share, foreign tax expense charge. Included in 2013 fourth-quarter results was a net loss from discontinued operations of $(1.6) million, or $(0.27) per diluted share.

“We are pleased to report continued strength, with double-digit, top- and bottom-line growth for the fourth consecutive quarter,” said Mark S. Gorder, president and chief executive officer of IntriCon. “Our fourth-quarter results capped off the strongest year for IntriCon from a net sales, gross margin and profitability perspective, since the Selas restructuring nearly a decade ago. Our strategy of developing partnerships with key value hearing health and medical customers, and concentrating on our highest potential opportunities in value hearing health and the medical biotelemetry market is taking hold, as evidenced by our recent announcement of the PC Werth contract.”

 

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IntriCon Corporation 2014 Fourth-Quarter Results

February 17, 2015

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Gross profit margins grew to 27.1 percent from 25.5 percent in the prior-year fourth quarter. The gains stemmed primarily from volume increases and cost reductions achieved from the company’s previously disclosed global restructuring plan.

 

Full-Year Results

For the 2014 full year, IntriCon reported higher net sales of $68.3 million and net income of $2.2 million, or $0.37 per diluted share. This compares to 2013 annual net sales of $53.0 million and a net loss of $(6.2) million, or $(1.08) per diluted share. Net income from continuing operations for the 2014 twelve-months was $2.5 million, or $0.42 per diluted share, with a discontinued operations net loss of $(270,000), or $(0.04) per diluted share. The 2013 annual results included a loss from continuing operations of $(2.3) million, or $(0.40) per diluted share, and a discontinued operations net loss of $(3.9) million, or $(0.68) per diluted share.

Gross profit margins increased to 27.1 percent from 23.0 percent for the full year 2013. Again, the improvement was primarily due to volume increases and cost reductions.

 

Business Update

Hearing health sales grew during the fourth quarter, rising 31 percent from the prior-year quarter, primarily due to initial gains on targeted value hearing health initiatives, including value hearing aids, personal sound amplifier products (PSAP) and assistive listening devices.

Said Gorder, “We continue to make significant strides in the hearing health market as demonstrated by the PC Werth partnership. As we’ve previously noted, within the conventional hearing health channel, industry growth and penetration rate continues to be stagnated by high device costs, distribution inefficiencies and retail consolidation. These factors, along with the rapidly growing aging population, have created a need for an outcomes-based hearing health model. To capitalize on this opportunity, we are concentrating our efforts on significant prospective partnerships and customers, and are aggressively pursuing the value hearing aid and PSAP channels.”

 

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IntriCon Corporation 2014 Fourth-Quarter Results

February 17, 2015

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PC Werth, through its partnership with IntriCon, has been appointed one of the main suppliers to the NHS Supply Chain's National Framework. The NHS is the largest purchaser of hearing aids in the world, supplying an estimated 1.2 million hearing aids annually. Under the agreement, PC Werth will distribute IntriCon hearing aid products under the Kamplex brand name. PC Werth will provide the required marketing, selling, training and service support. IntriCon is currently working on product approval with the NHS Audiology Supplies Group and anticipates having product approved and available for sale in the first half of 2015.

Sales in IntriCon’s medical business declined 9 percent in the 2014 fourth quarter compared to the year-ago period, primarily driven by an anticipated reduction in sales to IntriCon’s largest customer, Medtronic. To support Medtronic’s MiniMed 530G insulin pump launch in late 2013, IntriCon built and sold significant inventory from the fourth quarter of 2013 through the first half of 2014. While the company has satisfied the initial launch volume requirements, IntriCon anticipates sequential Medtronic revenue growth in the 2015 first quarter and throughout 2015.

Fourth-quarter 2014 professional audio communication sales rose 41 percent from the prior-year period. During the quarter, the company completed the final delivery on a significant contract with the Singapore government to provide technically advanced headsets worn in military applications. 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, “2014 was a very successful year. We posted the strongest revenue and earnings in a decade, completed our restructuring of the business and importantly, made great strides in establishing our infrastructure to drive growth in our value hearing health business. As we carry this positive momentum into 2015, we anticipate higher sales for the full year, with our first-quarter revenue consistent with our 2014 fourth quarter. Strategically, as we look to the future, we will maintain our focus on aggressively expanding our value hearing health reach and pursuing opportunities in value hearing health and medical biotelemetry.”

 

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IntriCon Corporation 2014 Fourth-Quarter Results

February 17, 2015

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Conference Call Today

As previously announced, the company will hold an investment community conference call today, Tuesday, February 17, 2015, beginning at 4 p.m. CT. Mark Gorder, president and chief executive officer, and Scott Longval, chief financial officer, will review fourth-quarter performance and discuss the company’s strategies. To join the conference call, dial: 1-888-438-5448 and provide the conference ID number 5633695 to the operator.

A replay of the conference call will be available three hours after the call ends through 7 p.m. CT on Tuesday, March 3, 2015. To access the replay, dial 1-888-203-1112 and enter passcode: 5633695.

 

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.

 

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, 2013. 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:
Scott Longval, CFO
651-604-9526
slongval@intricon.com
At PadillaCRT:
Matt Sullivan
612-455-1709
matt.sullivan@padillacrt.com

 

 

 

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IntriCon Corporation 2014 Fourth-Quarter Results

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INTRICON CORPORATION

Consolidated Condensed Statements of Operations

 (In Thousands, Except Per Share Amounts)

                     

 

   Three Months Ended   Twelve Months Ended 
   December 31,   December 31,   December 31,   December 31, 
   2014   2013   2014   2013 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
                 
Sales, net  $16,481   $15,026   $68,303   $52,961 
Cost of sales   12,018    11,189    49,819    40,792 
Gross profit   4,463    3,837    18,484    12,169 
                     
Operating expenses:                    
Sales and marketing   884    884    3,699    3,308 
General and administrative   1,575    1,350    6,462    5,789 
Research and development   1,302    1,184    4,832    4,181 
Restructuring charges       30    83    229 
Total operating expenses   3,761    3,448    15,076    13,507 
Operating income (loss)   702    389    3,408    (1,338)
                     
Interest expense   (99)   (132)   (461)   (600)
Equity in loss of partnerships   (71)   (78)   (228)   (262)
Other income (expense)   105    14    227    127 
Income (loss) from continuing operations before  income taxes and discontinued operations   637    193    2,946    (2,073)
                     
Income tax expense   277    58    428    217 
Income (loss) before  discontinued operations   360    135    2,518    (2,290)
Loss on sale of discontinued operations           (120)    
Loss from discontinued operations, net of income taxes       (1,558)   (150)   (3,872)
Net income (loss)  $360   $(1,423)  $2,248   $(6,162)
                     
Basic income (loss) per share:                    
Continuing operations  $0.06   $0.02   $0.43   $(0.40)
Discontinued operations       (0.27)   (0.05)   (0.68)
Net income (loss) per share:  $0.06   $(0.25)  $0.39   $(1.08)
                     
Diluted income (loss) per share:                    
Continuing operations  $0.06   $0.02   $0.42   $(0.40)
Discontinued operations       (0.27)   (0.04)   (0.68)
Net income (loss) per share:  $0.06   $(0.25)  $0.37   $(1.08)
                     
Average shares outstanding:                    
Basic   5,831    5,710    5,791    5,699 
Diluted   6,122    5,710    6,038    5,699 

 

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IntriCon Corporation 2014 Fourth-Quarter Results

February 17, 2015

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INTRICON CORPORATION

Consolidated Condensed Balance Sheets

(In Thousands, Except Per Share Amounts)

           

 

   December 31,   December 31, 
   2014   2013 
Current assets:          
Cash   $328   $217 
Restricted cash   640    568 
Accounts receivable, less allowance for doubtful accounts of $120 at December 31, 2014 and $124 at December 31, 2013   7,673    5,433 
Inventories   9,983    9,400 
Other current assets   1,013    1,337 
Current assets of discontinued operations       382 
Total current assets   19,637    17,337 
           
Machinery and equipment   35,104    33,971 
Less:  Accumulated depreciation   30,859    29,232 
Net machinery and equipment   4,245    4,739 
           
Goodwill   9,194    9,194 
Investment in partnerships   387    569 
Other assets, net   498    749 
Other assets of discontinued operations       132 
Total assets  $33,961   $32,720 
           
Current liabilities:          
Checks written in excess of cash  $516   $279 
Current maturities of long-term debt   1,886    2,210 
Accounts payable    5,438    5,037 
Accrued salaries, wages and commissions   2,519    1,676 
Deferred gain   110    110 
Other accrued liabilities   1,364    1,893 
Current liabilities of discontinued operations       154 
Total current liabilities   11,833    11,359 
           
Long-term debt, less current maturities   4,627    6,271 
Other postretirement benefit obligations   485    531 
Accrued pension liabilities   741    839 
Deferred gain   55    165 
Other long-term liabilities   113    247 
Total liabilities   17,854    19,412 
Commitments and contingencies          
Shareholders’ equity:          
Common stock, $1.00 par value per share; 20,000 shares authorized; 5,844 and 5,727 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively   5,844    5,727 
Additional paid-in capital   16,939    16,434 
Accumulated deficit   (6,274)   (8,522)
Accumulated other comprehensive loss   (402)   (331)
Total shareholders’ equity   16,107    13,308 
Total liabilities and shareholders’ equity  $33,961   $32,720 

 

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