Why Shares of Cardiovascular Systems Inc. Were Down

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Why Shares of Cardiovascular Systems Inc. Were Down

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Cardiovascular Systems is a medical device /technology company focused on patients with peripheral and coronary artery diseases. The company was founded in 1989. The company (CSII) develops an orbital atherectomy technology for both coronary and peripheral commercial applications.

What happened

On Wednesday, shares of Cardiovascular Systems (NASDAQ: CSII) were down by 10.2%.  In 2020, the company (CSII) reported a loss of 10% per share in the second fiscal quarter. In the second fiscal quarter, Cardiovascular System’s (CSII) revenues were $68.3 million and it marked a 13.5% year over year increase.

In the quarter, Global Coronary device revenues grew 30% over the year to $20.8 million and during this quarter the domestic coronary revenues increased by 22% to $18.5 million. Global Peripheral revenue was up by 8% to $47.6 million and domestic peripheral revenues grew by 9% to $47.5 million. U.S. revenue has increased by 13% to $66 million, and International revenue rose by $2.4 million.

79.9% Gross margin was reported in this quarter. The financial position of the company in the second fiscal quarter 2020, cash and cash equivalents of $65.5 as compared with $58.9 million at the end of the first fiscal quarter 2020. CSII’s CEO said, that strong first-quarter revenue growth reflects the momentum of both peripheral or coronary franchises.

World wide coronary revenue has increased by 26% and peripheral revenue has grown by 10%. Throughout the fiscal quarter 2020, the company (CSII) has offered both peripheral and coronary procedure support products in the U.S. and launched orbital atherectomy in new geographies.

So what

On Tuesday, The company’s (CSII) shares worth were approx. $38.50. Cardiovascular Systems (CSII) has announced a public offering of 3,676,471 shares of its common stock for $34 per share. This is how the company (CSII) raised funds by offering public common stock. The company (CSII) is giving underwriters the choice to buy an additional 551,470 shares within 30 days and Cardiovascular Systems (CSII) is aiming to increase $125 million from this round of fundraising, which the company (CSII) wants to close on June 12,2020. The company (CSII) will use the proceeds from the public offering of common stock for working capital and corporate purposes.

Now what

Like other companies, Cardiovascular Systems (CSII) has been hit hard in this ongoing health crisis. In the press release, the company (CSII) is announcing its financial reports for its Q3 2020. The company (CSII) said, Healthcare system response to COVID-19 pandemic delayed atherectomy procedures and negatively impacted Q3 results.  In the third quarter, the company (CSII) has sold $2.2 million of procedure support products, like the sapphire angioplasty balloons and Teleport microcatheters.

In the third-quarter earnings conference call, Cardiovascular Systems (CSII) CEO Scott Ward said that with a solid balance sheet, access to capital, strong gross margins and no long term debt, the company will persevere through this pandemic and resume their double-digit growth trajectory when coronavirus subsides and the healthcare system recovers.

Highlights

  • In this quarter company (CSII) reported revenue of $61.2 million, $2.1 or 34% it has decreased from 2019 third quarter of fiscal.
  • And 80% was the gross profit margin. Selling, general and administrative expenses were $41.4 million.
  • In fourth operating quarter expenses are expected between ($ 44 million to $46 million) and it has decreased more than 15% as compared to last year.
  • On March 31, 2020 Cardiovascular system (CSII) had ($107.3 million) cash and marketable securities and there is no outstanding long- term debt.
  • Research and development expenses has increased 8.8% to $10.0 million.
  • $1.1 million was total EBITDA loss.
  • Healthcare company has recorded net loss $0.08 per share and net earnings $0.02 in this quarter.
  • Credit facility has increased to $50 million and it extended to March 2022.
  • Cardiovascular systems (CSII) financial condition seemed to be strong.
  • The company’s (CSII) price or operating cash flow metric is more than 98.99% of the stock, set with a positive cash flow.
  • The company’s (CSII) debt to operating expenses ratio is higher than 12.14% of US equities.
  • Cardiovascular systems (CSII) reported -319.61% earnings growth, and US stock 5.39%.

Cardiovascular Systems (CSII) has produced more consecutive 12- month cash flow than just 4.9% of its Healthcare. The business’ balance sheet reveals debt to be 2% of the company’s capital (CSII).

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