Intricon Corp (NASDAQ: IIN), Arden Hills, Minn, a designer and developer of miniature implantable and body-worn medical devices including amplification devices, announced its third-quarter 2020 (Q3 2020) financial results (ended September 30).
Although the company’s Q3 revenue grew to $27.4 million compared to $26.9 million in the prior year (about 2%), its Hearing Health revenue was $5.5 million in Q3 compared to $6.4 million in Q3 2019, a decrease of about 14%. The revenue decline was largely attributed to the absence of revenue from hi Health Innovations (now United Healthcare Hearing) revenue and a reduction in advertising as part of the Hearing Help Express restructuring efforts, says the company. Intricon has also been developing a self-fitting ecosystem for over-the-counter (OTC) corporate partners ahead of the FDA’s proposed guidelines for this future class of amplification devices.
“Third quarter results included both year-over-year and sequential revenue growth as we see improvement across all our target medical markets. Continued emphasis on expense control while leveraging our core competencies to enter new medical markets for long-term growth remains a priority,” said Scott Longval, president and CEO who assumed the leadership mantle in October following the retirement of Mark Gorder, a founding leader of the company. “Our acquisition of Emerald Medical Services earlier this year is already demonstrating a meaningful contribution, while our directed focus on partnerships with innovators entering the emerging hearing health market is gaining traction.”
Included in Intricon’s Q3 2020 financial highlights were:
- Diabetes revenue declined 7.7% year-over-year;
- Other medical revenue increased 81.6% year-over-year, which included the contribution from recently acquired Emerald Medical Services
- Gross margin of 26.3%, compared to 25.2% in the prior year period
Net income per diluted share of $0.07 versus net loss of $0.03 per diluted share in the prior year period
Revenue in Intricon’s Medical business was $20.6 million, an increase from $19.1 million in the comparable prior-year period. According to the company, the year-over-year increase was driven primarily by Intricon’s medical coils business and the impact of Emerald Medical Services which the company acquired in May 2020, partially offset by the reduction in orders due to uncertainty surrounding the COVID-19 pandemic.
According to the company, gross margin in the third quarter of 2020 was 26.3%, compared to 25.2% in the prior-year third quarter, primarily due to the cost reduction initiatives and higher volumes. Operating expenses for the third quarter were $6.7 million, compared to $7.2 million in the comparable prior-year period. The change in operating expenses year over year was due to the cost reduction initiatives.
The company posted a net income of $0.6 million or $0.07 per diluted share in the third quarter of 2020, versus net loss of $0.3 million or $0.03 per diluted share, for the 2019 third quarter.