Cyberonics (CYBX), a medical technology company, has recorded a 55.86 percent surge in profit for the quarter ended Jul. 25, 2014, helped by sharp decline in costs and expenses.
The company earned $13.52 million or $0.50 a share in the first-quarter compared with $8.67 million or $0.31 a share a year ago. Adjusted earnings per share came in at $0.53, when analysts expected $0.55.
Revenue during the first-quarter grew 4.54 percent to $72 million from $68.87 million in the last year period.
Gross margin expanded by 60 basis points over the previous year period to 91.10 percent.
Total expenses as a percentage of revenues decreased to 69.44 percent from 80.25 percent in the same period last year. That has resulted in expansion of 1,081 basis points in operating margins to 30.56 percent.
The company posted operating income of $22 million, compared with $13.60 million in the previous year period.
"Cyberonics continued to deliver increased sales and earnings during our first quarter of fiscal 2015 over the same quarter last year," said Dan Moore, president and chief executive officer.
"However, overall net sales for the quarter fell short of our expectations by approximately $1 million. The softness was in our U.S. business, where unit sales grew by 2%, and net sales increased by 4% over the comparable period in the prior year to a new high of $58.8 million. We have not yet reestablished year-on-year growth in new patient adoption. While we expect greater productivity in the second quarter from our new field sales employees, the entire Cyberonics US commercial team remains focused on restoring new patient growth. The team has implemented additional initiatives for the second quarter targeting comprehensive epilepsy centers and physicians who have been inconsistent in their utilization of VNS Therapy. We remain optimistic about the potential for VNS Therapy in this underserved market. As mentioned last quarter, we are increasing our investment in sales and marketing significantly for fiscal 2015.
For full-year, the company expects revenues to be in the range of $300 to $307 million.
Cash Flow
Cyberonics has generated cash of $18.10 million from operating activities during the quarter, up 90.75 percent or $8.61 million when compared with the last year period. The company has generated 25.13 cents of operating cash flow in every sales dollar for the quarter, up from 13.78 cents in the same period last year.
The company has spent $1.81 million cash to meet investing activities during the quarter, as against cash outgo of $17.08 million in the last year period.
The company has spent $11.79 million cash to meet financing activities during the quarter, as against cash outgo of $6.81 million in the last year period.
As on Jul. 25, 2014, the company's cash balance stood at $107.68 million, up 1.28 percent or $1.36 million from Jul. 26, 2013.
Working Capital
Cyberonics has witnessed an increase in the working capital over the last one year. The company's working capital stood at $190.95 million as at Jul. 25, 2014, up $14.18 million or 8.02 percent from $176.77 million on Jul. 26, 2013. It registered an increase in current ratio to 8.91 as at Jul. 25, 2014 from 7.57 on Jul. 26, 2013.
