INTRICON CORP vadovybės finansinės būklės ir veiklos rezultatų aptarimas ir analizė (forma 10-Q)

INTEGER HOLDINGS CORP VADOVYBĖS FINANSINĖS BŪKLĖS BEI OPERACIJŲ REZULTATŲ APTARIMAS IR ANALIZĖ (10-Q forma)
The following management discussion and analysis ("MD&A") provides information
that the Company believes is useful in better understanding the operating
results, cash flows and financial condition of the Company. Quantitative
information is provided about the material revenue and expense drivers as well
as any other significant factors we believe are useful for understanding our
results. The MD&A should be read in conjunction with both the condensed
consolidated financial information and related notes included in this Form 10-Q,
and Management's Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on Form 10-K for the year ended
December 31, 2021. This discussion contains various "Non-GAAP Financial
Measures" and also contains various "Forward-Looking Statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. We refer
readers to the statements entitled "Non-GAAP Financial Measures" and
"Forward-Looking Information and Cautionary Statements" located at the end of
Item 2 of this report.



Business Overview



Intricon Corporation (together with its subsidiaries referred herein as the
"Company", or "Intricon", "we", "us" or "our") is an international joint
development manufacturer ("JDM") of micromedical components, sub-assemblies and
final devices. The Company serves as a JDM partner to leading medical device
original equipment manufacturers ("OEMs") by designing, developing, engineering,
manufacturing, packaging and distributing micromedical products for high growth
markets, such as diabetes, peripheral vascular, interventional pulmonology,
electrophysiology and hearing healthcare. Our mission is to improve, extend and
save lives by advancing innovative micromedical technologies through joint
development and manufacturing partnerships with industry leading medical device
companies.



Market Overview



Intricon serves as a JDM to leading medical device OEMs by designing,
developing, engineering, manufacturing, packaging and distributing micromedical
products, microelectronics, micro-mechanical assemblies, complete assemblies and
software solutions. Revenue from these markets is reported on the respective
diabetes, other medical, hearing health value based direct-to-end-consumer
(DTEC), hearing health value based indirect-to-end-consumer (ITEC), hearing
health legacy OEM, and professional audio communications in the discussion of
our results of operations in "Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 3 "Revenue Recognition"
to the Company's condensed consolidated financial statements included herein.



The Company manufactures microelectronics, micro-mechanical assemblies,
high-precision injection-molded plastic components and complete body-worn
devices for leading and emerging medical device manufacturers. Intricon
currently serves this market by offering medical device manufacturers the
capabilities to design, develop, engineer, manufacture, package and distribute
medical devices that are easier to use, smaller, lighter and use less power.
Increasingly, the medical device industry is looking to outsource the
manufacturing, assembly and packaging of their products.



The Company believes several factors have come together over the last few years
to enable the emergence of a US market disruptive value hearing aid. These
factors include the continued consolidation of retail (causing escalating
hearing aid prices), consumer outcry, consumer education, advancements in
technology (such as behind-the-ear devices, advanced digital signal processing,
low-power wireless, and self-fitting software) and pending regulatory change to
allow the sale of over-the-counter ("OTC") hearing aids. On October 19, 2021,
the FDA proposed a draft regulations to establish a new regulatory category of
OTC hearing aids that when finalized, would allow hearing aids to be sold
throughout the country directly to consumers in stores or online without a
medical exam or a fitting by a licensed practitioner, such as an audiologist.



To best approach this market opportunity, the Company has sharpened its focus to
identify potential high-profile branding partners that value Intricon's ability
to deliver superior hearing aids, self-fitting software, and customer care to
the U.S. market.



The Company is committed to increasing investments to support its medical
business development efforts. In early 2019, the Company hired a vice president
of medical business development and in August 2021 the Company hired a vice
president of research and development. The Company expanded our core
competencies and diversified our revenue base with the acquisition of EMS in
2020. The Company believes it has significant opportunities to serve the
emerging home care markets through its already developed core competencies and
capabilities to develop devices that are more technologically advanced, smaller
and lightweight.


Daugiau informacijos apie Bendrovės rinkas ir pagrindines technologijas rasite pasibaigusių metų Bendrovės 10-K formos metiniame pranešime. 2021 m. gruodžio 31 d.




                                       19

————————————————— —- ——————————-

  Table of Contents



Results of Operations



Overall Results


2022 m. pirmojo ketvirčio rezultatai buvo tokie:



  ? GAAP diluted net loss per share was $0.07.


  ? Adjusted non-GAAP diluted net income per share was $0.24.

? Palyginti su ankstesniais metais, bendros pajamos padidėjo 4,1 proc., o tai paskatino paklausos augimas

mūsų produktai nuo diabeto.

? Bendrasis pelnas, išreikštas procentais nuo pajamų, padidėjo 1,0 %, iš dalies dėl padidėjusio

apimtis ir produktų mišinys.

? Ketvirčio veiklos nuostolis buvo (429 USD), palyginti su veiklos pajamomis

848 USD palyginamuoju ankstesniu laikotarpiu, lėmė vienkartinės su susijungimu susijusios išlaidos.





Revenue, net



Below is a summary of our revenue by main markets for the three months ended
March 31, 2022 and 2021:



                                                                     Change
Three Months Ended March 31,          2022         2021       Dollars       Percent
Diabetes                            $ 20,323     $ 18,364     $  1,959         10.7 %
Interventional Catheters               3,271        3,802         (531 )      -14.0 %
Other Medical                          3,699        2,958          741         25.1 %
Hearing Health Value Based DTEC          685          937         (252 )      -26.9 %
Hearing Health Value Based ITEC        1,144        1,301         (157 )      -12.1 %
Hearing Health Legacy OEM              2,726        3,421         (695 )      -20.3 %
Professional Audio Communications      1,212          985          227         23.0 %
Total Net Revenue                   $ 33,060     $ 31,768     $  1,292          4.1 %



Už tris pasibaigusius mėnesius 2022 m. kovo 31 dGrynosios pajamos diabeto medicinos rinkoje padidėjo 10,7 %, palyginti su tuo pačiu 2021 m.

Intervencinių kateterių grynosios pajamos per tris pasibaigusius mėnesius 2022 m. kovo 31 d sumažėjo 14,0%, palyginti su tuo pačiu 2021 m. laikotarpiu dėl tiekimo grandinės apribojimų.




Other medical net revenue for the three months ended March 31, 2022 increased
25.1% compared to the same period in 2021. The increase was driven by
commercialization of newly developed products as the Company continues to expand
its surgical navigation product offering.



                                       20

————————————————— —- ——————————-

Turinys




Net revenue in our hearing health value based DTEC business for the three months
ended March 31, 2022 decreased 26.9% compared to the same period in 2021 due to
the reduced investment and restructuring of this business beginning in the
second quarter 2020.



Net revenue in our hearing health value based ITEC business for the three months
ended March 31, 2022 decreased 12.1% compared to the same period in 2021. The
decline was due to supply chain constraints of key components.



Net revenue in our hearing health legacy OEM business for the three months ended
March 31, 2022 decreased 20.3% compared to the same period in 2021 due to timing
of orders and supply chain constraints.



Net revenue to the professional audio communications sector for the three months
ended March 31, 2022 increased 23.0% compared to the same period in 2021 due to
increased product demand and easing of COVID restrictions in Singapore.



Gross Profit


Bendrasis pelnas, išreikštas doleriais ir procentais nuo pajamų, per tris pasibaigusius mėnesius 2022 m. kovo 31 d ir 2021 m., buvo taip:




Three Months Ended
March 31,                          2022                            2021                          Change
                                         Percent                         Percent
                         Dollars        of Revenue       Dollars        of Revenue       Dollars        Percent
Gross Profit            $    8,872             26.8 %   $    8,210             25.8 %   $      662            8.1 %




Gross profit as a percentage of revenue for the three months ended March 31,
2022 increased 1.0% from the prior period due, in part, to increased demand and
product mix.



Operating Expenses



Operating expenses for the three months ended March 31, 2022 and 2021 were as
follows:



Three Months Ended
March 31,                          2022                            2021                          Change
                                         Percent                         Percent
                         Dollars        of Revenue       Dollars        of Revenue       Dollars        Percent
Sales and marketing     $    2,318              7.0 %   $    1,982              6.2 %   $      336           17.0 %
General and
administrative               4,310             13.0 %        4,052             12.8 %          258            6.4 %
Research and
development                  1,587              4.8 %        1,293              4.1 %          294           22.7 %
Merger-related costs         1,032              3.1 %            -              0.0 %        1,032          100.0 %
Other operating
expenses                        54              0.2 %           35              0.1 %           19           54.3 %



Pardavimų ir rinkodaros išlaidos už tris pasibaigusius mėnesius 2022 m. kovo 31 dpadidėjo, palyginti su atitinkamais ankstesniais laikotarpiais dėl padidėjusio vidinio pardavimo atlygio ir paskatų, susijusių su darbuotojų skaičiumi ir per metus pagerėjusiais pardavimais.




                                       21

————————————————— —- ——————————-

Turinys




General and administrative expenses for the three months ended March 31, 2022,
increased from the prior year period due to higher salaries, wages, incentives,
and third-party fees.


Tyrimų ir plėtros išlaidos už tris pasibaigusius mėnesius 2022 m. kovo 31 d
padidėjo, palyginti su praėjusių metų laikotarpiu dėl naujų produktų kūrimo plėtros.

Su susijungimu susijusios išlaidos apima teisinius, konsultavimo ir apskaitos mokesčius, susijusius su derybomis dėl Susijungimo sutarties ir jos vykdymu su subjektais, susijusiais su Altaris Capital LLC pirmąjį 2022 m. ketvirtį. Žr. 2 pastabą.

Kitos veiklos sąnaudos yra susijusios su neapibrėžtojo atlygio įsipareigojimo tikrosios vertės pokyčiais.



Interest expense, net


Palūkanų sąnaudos, grynosios už tris pasibaigusius mėnesius 2022 m. kovo 31 d buvo 1 USD palyginus su 9 USD už palyginamąjį 2021 m.



Other expense, net



Other expense, net for the three months ended March 31, 2022 was $152 compared
to $77 for the same periods in 2021. The increase in expense over the prior year
period was due to a reduction in funds received from the Singapore government
paid to our subsidiaries for COVID-19 relief and employment credits received in
2021.



Income tax expense



Income tax expense for the three months ended March 31, 2022 was $15 compared to
$90 for the same periods in 2021. The change in income tax expense relates to a
decrease in estimates for foreign income taxes for the year-to-date period.



                                       22

————————————————— —- ——————————-

  Table of Contents



Net (Loss) Income


Grynosios (nuostolio) pajamos ir ne GAAP pakoreguotos grynosios pajamos yra šios:



                                                                 Three Months Ended
                                                            March 31,         March 31,
                                                               2022              2021

Grynosios (nuostolio) pajamos – GAAP priskiriamos Intricon (657 USD)

  $        714
Identified adjustments attributable to Intricon:
Depreciation (1)                                                    874     

841

Amortization of intangibles (2)                                     528               497
Stock-based compensation (3)                                        481               453
Other amortization (4)                                               58               102
Fair value of contingent consideration (5)                           38                35
COVID-19 Singapore government support (6)                             -              (121 )
Merger Related Costs (7)                                          1,032                 -

Ne GAAP pakoreguotos grynosios pajamos, priskirtinos Intricon
(8)

                                                        $      2,354     

2521 USD


Average basic shares outstanding                                  9,256     

8 994

Average diluted shares outstanding                                9,712     

9 607

Non-GAAP adjusted net income attributable to Intricon
per diluted share                                          $       0.24      $       0.26




(1) Depreciation represents the expense of property, plant and equipment.
(2) These expenses represent amortization expenses of intangible assets.
(3) Stock-based compensation represents expenses related to awards under the
Company's equity incentive plans.
(4) These expenses represent amortization of other assets.
(5) These expenses represent changes in the fair value of contingent
consideration in the period for the purchase of EMS.
(6) The Singapore Government provided COVID-19 financial assistance to our
Singapore subsidiaries during the first quarter of 2021.
(7) In February of 2022, the Company entered into a Merger Agreement with
affiliates of Altaris Capital Partners LLC. In connection with the negotiation
and execution of the Merger Agreement, the Company incurred $1,032 in legal,
accounting and consulting fees.
(8) None of these adjustments have material income tax impacts due to the
Company's net loss position as of March 31, 2022.




Likvidumas ir kapitalo ištekliai




We continue to maintain adequate liquidity to operate our businesses. As of
March 31, 2022, we had $5,311 of cash and cash equivalents on hand as well as
$15,457 of short-term investment securities maturing within the next twelve
months for a total of $20,768 of liquid capital. Sources of our cash for the
three months ended March 31, 2022 have been from our operating and investing
activities, as described below. The Company's cash flows from operating,
investing and financing activities, as reflected in the statement of cash flows,
are summarized as follows:



                                                   Three Months Ended
                                           March 31, 2022      March 31, 2021
Cash provided by (used in):
Operating activities                      $         (1,658 )   $         5,865
Investing activities                                 1,627              (2,511 )
Financing activities                                  (311 )              (245 )
Effect of exchange rate changes on cash                 62                  

22

Net (decrease) increase in cash           $           (280 )   $         3,131




Net cash used in operating activities was $1,658 for the three months ended
March 31, 2022, compared to $5,865 net cash provided by for the same period in
2021 primarily due to increasing inventories to meet forecasted demand as well
as inflationary pressures.



                                       23

————————————————— —- ——————————-

Turinys




Net cash provided by investing activities was $1,627 for the three months ended
March 31, 2022, compared to $2,511 used in investing activities, for the same
period in 2021. The variance was primarily the result of timing of purchases and
maturities of the Company's investments.



Net cash used in financing activities was $311 for the three months ended March
31, 2022 compared to $245 for the same period in 2021 primarily due to payments
on liabilities related to intangible assets.



Bendrovė sudarė tokius banko susitarimus 2022 m. kovo 31 d:



Domestic Credit Facilities



The Company and its domestic subsidiaries are parties to a credit facility with
CIBC Bank USA. The credit facility, as amended through the date of this filing,
provides for a $12,000 revolving credit facility, with a $200 sub facility for
letters of credit. Under the revolving credit facility, the availability of
funds depends on a borrowing base composed of stated percentages of the
Company's eligible trade receivables and eligible inventory, and eligible
equipment less a reserve. The credit facility matures on December 15, 2022.



Bendrovė laikėsi visų taikomų kredito sutarties sąlygų 2022 m. kovo 31 d.



Foreign Credit Facility



In addition to its domestic credit facilities, the Company's wholly-owned
subsidiary, Intricon, PTE LTD., has an international senior secured credit
agreement with Oversea-Chinese Banking Corporation Ltd. that provides for an
asset-based line of credit. Borrowings bear interest at a rate of .75% to 2.5%
over the lender's prevailing prime lending rate.



Capital Adequacy



We believe that funds expected to be generated from operations, funds maintained
in liquid investments and funds available under our revolving credit loan
facility will be sufficient to meet our anticipated cash requirements for
operating needs for at least the next 12 months. While management believes that
we will be able to meet our liquidity needs for at least the next 12 months, no
assurance can be given that we will be able to do so.



As of March 31, 2022, and December 31, 2021, the Company had a total borrowing
capacity under its credit facilities of $14,291 and $14,294, respectively, with
no borrowings outstanding at the end of each reporting period.



                                       24

————————————————— —- ——————————-

Turinys

Svarbių apskaitos politikų santrauka




The Company's significant accounting policies are detailed in "Note 1: Summary
of Significant Accounting Policies" of the Company's Annual Report on Form 10-K
for the year ended December 31, 2021. The Company follows these policies in
preparation of the condensed consolidated financial statements.



Ne GAAP finansinės priemonės




This Quarterly Report on Form 10-Q, including "Management's Discussion and
Analysis of Financial Condition and Results of Operation" in Item 2, contains
financial measures that have not been calculated in accordance with accounting
principles generally accepted in the U.S. (GAAP). These non-GAAP measures
include adjusted net income and adjusted net income per diluted share.



These non-GAAP financial measures reflect adjustments for expenses and gains
that the Company believes do not reflect the Company's core operating
performance. The Company has presented these non-GAAP financial measures because
the Company believes this presentation, when reconciled to the corresponding
GAAP measures, provides useful information to investors in evaluating the
Company's operational performance. Management uses these non-GAAP measures
internally to evaluate our performance and in making financial, operational and
planning decisions, including with respect to incentive compensation. The
Company believes that the presentation of these measures provides investors with
greater transparency with respect to the Company's results of operations and
that these measures are useful for period-to-period comparison of results and
trends. The Company further believes that the use of these non-GAAP financial
measures provides an additional tool for investors in comparing the Company's
financial results with the financial results of other companies.



The Company periodically reassesses the components of non-GAAP adjustments for
changes in how the Company evaluates its performance, changes in how the
Company makes financial and operational decisions, and considers the use of
these measures by Intricon's competitors and peers to ensure the adjustments are
still relevant and meaningful.



Non-GAAP financial measures should not be used as a substitute for GAAP
measures, or considered in isolation, for the purpose of analyzing our operating
performance. The presentation of these non-GAAP financial measures should not be
construed as an inference that future results will not be affected by similar
items.


Į ateitį žvelgiantys ir įspėjamieji pareiškimai




Certain statements included in this Quarterly Report on Form 10-Q or documents
the Company files with the Securities and Exchange Commission, which are not
historical facts, or that include forward-looking terminology such as "may",
"will", "believe", "anticipate", "expect", "should", "optimistic" "continue",
"estimate", "intend", "plan", "would", "could", "guidance", "potential",
"opportunity", "project", "forecast", "confident", "projections", "scheduled",
"designed", "future", "discussion", "if" or the negative thereof or other
variations thereof, are forward-looking statements (as such term is defined in
Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933, and the regulations thereunder), which are intended to
be covered by the safe harbors created thereby. These statements may include,
but are not limited to statements in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Notes to the Company's
Condensed Consolidated Financial Statements" such as risks in connection with
the Merger Agreement and the Merger, estimates of future results, the expected
results and impacts of the EMS acquisition, statements regarding the effects of
the COVID-19 pandemic, statements regarding the estimated costs and expenses of
the restructuring and estimated annual expense savings, net operating loss
carryforwards, the ability to meet cash requirements for operating needs, the
ability to meet liquidity needs, assumptions used to calculate future level of
funding of employee benefit plans, the adequacy of insurance coverage and the
impact of new accounting pronouncements and litigation. Forward-looking
statements also include, without limitation, statements as to the Company's
expected future results of operations and growth, strategic alliances and their
benefits, government regulation, potential increases in demand for the Company's
products, the Company's ability to meet working capital requirements, the
Company's business strategy, the expected increases in operating efficiencies,
anticipated trends in the Company's markets, estimates of goodwill impairments
and amortization expense of other intangible assets, the effects of litigation
and the amount of insurance coverage, and statements as to trends or the
Company's or management's beliefs, expectations and opinions.



Forward-looking statements are subject to risks and uncertainties and may be
affected by various factors that may cause actual results to differ materially
from those in the forward-looking statements. In addition to the factors
discussed in this Quarterly Report on Form 10-Q, certain risks, uncertainties
and other factors can cause actual results and developments to be materially
different from those expressed or implied by such forward-looking statements,
including those described within "Item 1A. Risk Factors" in the Company's Annual
Report on Form 10-K for the year ended December 31, 2021 and the other risks
described elsewhere in this Quarterly Report on Form 10-Q, or in other filings
the Company makes from time to time with the Securities and Exchange Commission.
The Company does not undertake to update any forward-looking statement that may
be made from time to time by or on behalf of the Company.



                                       25

————————————————— —- ——————————-

Turinys

© Edgar Online, šaltinis Žvilgsniai

.

Parašykite komentarą

El. pašto adresas nebus skelbiamas.