Synovis Life Technologies, Inc. (NASDAQ: SYNO), today reported record revenue for the third quarter ended July 31, 2009.
For the 2009 fiscal third quarter, net revenue rose to $15.0 million, a 12 percent increase over $13.4 million in the year-ago period. Net loss on a GAAP basis for the third quarter of fiscal 2009 was $(4.9) million, or $(0.42) per share. Adjusted third quarter net income (non-GAAP), excluding certain special charges, was $2.2 million, or $0.19 per diluted share, up 24 percent from GAAP net income of $1.8 million, or $0.14 per diluted share, in the year-earlier period.
Synovis recorded several special charges in the third quarter, which totaled $8.2 million on a pretax basis and $7.1 million on an after-tax basis, or $0.61 per diluted share. These charges include: the other-than-temporary impairment of $4.1 million in auction rate securities; the immediate expensing of $3.5 million of acquired in-process research and development projects related to the purchase of the assets of Pegasus Biologics; and the write-off of $600,000 of intangibles related to a lower priority product. (See reconciliation table on page 6 for details.)
Richard W. Kramp, Synovis Life Technologies’ president and chief executive officer, said, “The accomplishments of this just-completed third quarter were significant and very important for the near- and long-term growth of Synovis. First, we again posted double-digit revenue gains and realized the 12th record revenue quarter in the last 13 quarters. Second, we are about to complete a 40 percent increase in our domestic direct sales force for our surgical products. And third, we have expanded our soft tissue technology base and regulatory approvals into the orthopedic and wound care markets with the acquisition of the assets of Pegasus Biologics. These achievements promise to increase returns to our shareholders for years to come and were accomplished with very modest investments. The Pegasus transaction brought products with full regulatory approval in the United States, as well as Europe, in the expanding orthopedic and wound care markets. The acquired technology provides a collagen matrix for soft tissue repair which completes the spectrum between our tightly cross-linked Apex technology and our non-cross linked, remodelable Veritas® technology.”
Known as “flexible cross-linking”, the Pegasus Biologics technology binds the potential antigenic sites in the collagen matrix to each other with a long chain, bio-compatible molecule preserving the natural mechanical characteristics of the material while also leaving larger spaces between the crosslinks to allow native tissue integration. This technology is particularly suited to wound healing and orthopedic applications.