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 and
year ended December 31, 2012.
For the 2012 fourth quarter, the company reported net sales of $16.7
million, an increase of 15.1 percent from the prior-year period.
IntriCon had net income of $332,000, or $0.06 per diluted share,
compared to a net loss of $(352,000), or $(0.06) per diluted share, for
the 2011 fourth quarter.
"We are pleased to have delivered growth across all markets for both the
quarter and year - in fact our body-worn device segment had a record
year," said Mark S. Gorder, president and chief executive officer of
"Our medical business posted its strongest revenue quarter ever, driven
by increased activity from our largest customer, Medtronic, among
others. In hearing health, our non-conventional personal sound amplifier
products, drove modest quarterly growth despite continued
softness in the conventional hearing health market. And in professional
audio communications we delivered significant gains, with sales
increasing 44 percent over the 2011 fourth quarter on strong demand for
securities products domestically and headset products internationally."
As a percentage of 2012 fourth-quarter sales, healthcare-related revenue
(hearing health and medical combined) totaled 72.7 percent (32.8 percent
hearing health and 39.9 percent medical), with professional audio
communications at 27.3 percent. This compares to 2011 healthcare-related
revenue of 78.2 percent (37.4 percent hearing health and 40.8 percent
medical), with professional audio communications at 21.8 percent.
Gross profit margins increased to 23.5 percent from 23.1 percent in the
prior-year fourth quarter. The gain was primarily due to higher sales
volume, partially offset by an unfavorable product mix within the
professional audio communications market.
Said Gorder, "As part of our margin enhancement program, we continued to
transfer select, labor-intensive programs to our Singapore and Indonesia
facilities during the fourth quarter. In an effort to drive further
margin improvement and remain competitive from a cost standpoint, we
will continue that shift in 2013. We're also working to increase the
percentage of proprietary IntriCon technology in all of our products by
investing in our core technologies-this also will have a favorable
effect on margins as we move through the 2013 year."
IntriCon reduced its operating expenses in the fourth quarter 2.8
percent, despite higher sales, reflecting the company's ongoing focus on
Full-Year ResultsFor the 2012 year, IntriCon reported net
sales of $63.9 million and net income of $709,000, or $0.12 per diluted
share. This is up from 2011 net sales of $56.1 million and a net loss of
$(1.4 million), or $(0.25) per diluted share. Hearing health sales rose
13.2 percent over the prior year, with medical and professional audio up
6.7 percent and 29.4 percent, respectively. Included in 2012 full-year
results was a one-time gain of $822,000, or $0.14 per diluted share,
from the previously disclosed sale of the company's 50-percent ownership
interest in Global Coils, to its Switzerland-based joint venture
partner, Audemars SA.
As a percentage of 2012 sales, healthcare-related revenue totaled 75.5
percent (37.2 percent hearing health and 38.3 percent medical), with
professional audio communications at 24.5 percent. This compares to 2011
healthcare-related revenue of 78.4 percent (37.5 percent hearing health
and 40.9 percent medical), with professional audio communications at
Gross profit margins for 2012 were 23.4 percent, up from 22.6 percent in
the prior year, primarily due to volume increases, partially offset by
an unfavorable product mix.
hi HealthInnovationsAs previously disclosed, IntriCon
satisfied hi HealthInnovations' initial product ramp-up needs for
hearing aids early in 2012. As a result, minimal new orders were
received in the second half of 2012. The company remains optimistic
about the long-term prospects of this program.
Said Gorder, "hi HealthInnovations continues to make progress building
the infrastructure to provide high-quality, affordable hearing health
care to a broad range of customers. During the year, UnitedHealthcare
expanded its hi HealthInnovation' program to more than 26 million
people enrolled in its employer-sponsored and individual health benefit
plans. We expect that this will open up additional opportunities for
IntriCon and that new orders will be received in the second half of
Business UpdateWithin IntriCon's medical business,
year-over-year sales rose 12.6 percent in the fourth quarter. The
growth, as previously stated, was primarily due to increased activity
from various large medical customers, most notably Medtronic. Near term,
the company expects medical sales going forward to continue to
On the cardiac front, IntriCon continues to deliver demo units of its
two FDA-approved wireless cardiac diagnostic monitoring (CDM)
devices-Centauri™ and Sirona™- to targeted customers to compile
feedback. Additionally, the company is expanding its CDM sales and
marketing infrastructure, to further advance its cardiac program and
elevate its devices with market-demanded features.
Said Gorder, "Our technology connects patients and caregivers in
non-traditional ways. We help shift the point of care from traditional
settings such as hospitals, to non-traditional settings like the home.
We accomplish this with devices that are more advanced, smaller and
lightweight. In 2013, we will focus more capital and resources in sales
and marketing to expand our reach to other large medical device
manufacturers and healthcare companies."
Within hearing health, IntriCon continues to experience softness in the
conventional market. Said Gorder, "The 13.2 percent growth we
experienced during the year came primarily from our hi
HealthInnovations work, and non-conventional personal sound
amplifier products. And in 2013, while we don't anticipate hi
HealthInnovations to ramp until the second half of the year, there
are several growth opportunities that give us optimism for the longer
term to strengthen our position as a supplier to the value hearing
"First, we continue to develop new technology to improve the user
experience. Our Audion6™, a six-channel hearing aid amplifier, is a
notable example. Audion6 is a feature-rich amplifier that fits a wide
array of applications and has a complete set of proven adaptive features.
"Second, hearing health technology is evolving beyond traditional
hearing aid applications. Devices can now wirelessly stream music,
television, audio or a companion's voice-making them significantly more
versatile and effective than traditional hearing devices. In addition,
this technology and functionality holds great potential in the
non-conventional personal sound amplifier market."
Fourth-quarter professional audio communications sales remained very
strong, up more than 44 percent from the prior-year period. The company
completed delivery on its significant contract with the Singapore
government during the quarter, providing technically advanced headsets
to be worn in difficult listening environments. Professional audio sales
going forward are expected to moderate to more historical levels.
Heightened Focus on MarketingSaid Gorder, "Over the past
five years we have invested heavily in our technology portfolio and
global manufacturing infrastructure. Better understanding customer and
market needs, and evolving our technology portfolio to meet those needs,
as well as developing new products and product platforms, is the next
step in our strategic plan.
"To that end, we will be increasing investments in marketing and sales
in 2013 to advance us down that path. That process has already begun and
we expect to add additional staff and resources throughout the year to
build customer relationships, market knowledge and sales."
Looking AheadConcluded Gorder, "As a business, our primary
goals are to build revenue, improve margins and grow our bottom line. We
plan to do so by: placing a heightened focus on marketing; raising the
percentage of proprietary IntriCon technology we incorporate in our
products; and leveraging our low-cost manufacturing footprint.
"Consistent with historical revenue cycles we anticipate a more moderate
2013 first quarter in comparison to our 2012 fourth quarter. That being
said, we are optimistic about our opportunities in 2013 and our ability
to execute and deliver growth."
Conference Call TodayAs previously announced, the company
will hold an investment community conference call today, Wednesday,
February 13, 2013, beginning at 4:00 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: 1-877-941-6009
(international 1-480-629-9818) and provide the conference identification
number 4596685 to the operator.
A replay of the conference call will be available one hour after the
call ends through 11:59 p.m. CT on Tuesday, February 19, 2013. To access
the replay, dial 1-800-406-7325 (international 1-303-590-3030) and enter
access code: 4596685.
About IntriCon CorporationHeadquartered 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 StatementsStatements 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, 2011. 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.
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