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IntriCon Reports 2016 First-Quarter Results

ARDEN HILLS, Minn., Apr 26, 2016 (BUSINESS WIRE) -- IntriCon Corporation IIN, +0.52% , a designer, developer, manufacturer and distributor of miniature and micro-miniature body-worn devices, today announced financial results for its first quarter ended March 31, 2016.

Highlights:

  • Net sales of $18.3 million increased 10 percent over the prior-year period;
  • The company’s value hearing health initiatives delivered both year-over-year and sequential growth;
  • Gross margins of 28.0 percent improved from 26.1 percent in the first quarter of 2015; and,
  • The company amended its credit facilities with The PrivateBank, creating a lending structure with broader financial flexibility.

First-Quarter Financial Results

For the 2016 first quarter, the company reported net sales of $18.3 million, up from $16.6 million in the prior-year period. Gross profit margins grew to 28.0 percent from 26.1 percent in the 2015 first quarter. The gains stemmed primarily from higher overall sales volume. IntriCon posted net income attributable to IntriCon shareholders of $15,000, or $0.00 per diluted share, compared to $284,000, or $0.05 per diluted share, for the 2015 first quarter.

“We are pleased to report year-over-year growth from a net sales and gross margin standpoint. We consciously increased our investment in the first quarter to accelerate expansion in value hearing health, which resulted in a slight decline in net income attributable to IntriCon shareholders,” said Mark S. Gorder, president and chief executive officer. “Our recent value hearing health efforts are beginning to gain traction and we delivered first-quarter net sales gains both year over year and sequentially. We intend to continue focusing our resources on building the infrastructure required to secure high-potential growth opportunities in the value hearing health market.”

Business Update

First-quarter hearing health sales grew 16 percent over the prior-year period. During the quarter, IntriCon experienced gains in value hearing aids, personal sound amplifier products (PSAP) and assisted listening devices. These were partially offset by anticipated decreases in conventional channel sales.

As previously noted, the conventional channel has experienced a trend of continuing market consolidation. As a result, six large manufacturers now control approximately 98 percent of the global market. However, market penetration has stagnated as end-consumer prices have risen dramatically. This has spurred the development of value hearing aids, PSAPs and assisted listening devices.

Moreover, on April 21, 2016, the U.S. Food and Drug Administration (FDA) hosted a public workshop to gather stakeholder and public input on draft guidance related to the agency's premarket requirements for hearing aids and PSAPs. The FDA’s intent is to consider ways in which regulation can support further device penetration into the hearing market.

“As a company, we are aligned with the FDA's efforts to overcome barriers to device access and spur development and innovation in cost-effective technology,” said Gorder. “We believe these factors create the need for the outcomes-based hearing health delivery model we’ve advocated. Our value hearing health strategy focuses on this need as we continue to build the infrastructure to secure other notable partners who can help drive the company's outcomes-based, hearing health delivery model.”

The company’s integration plan for PC Werth is proceeding on schedule. During the quarter, IntriCon delivered initial devices to the National Health Service and is eagerly awaiting customer feedback. In mid-April, earVenture, the...


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