Cardiovascular Systems Inc. CSII reported third-quarter fiscal 2016 adjusted net loss per share of 31 cents, narrower than the year-ago loss of 34 cents and the company’s guidance range of 42–45 cents per share. The adjusted number excludes the impact of certain one-time costs of $12.4 million. The Zacks Consensus Estimate of a loss of 44 cents remained way below the company’s adjusted number.Without these adjustments, Cardiovascular Systems reported loss of 69 cents, compared to loss of 34 cents per share in the year-ago quarter.According to the company, the improvement in operating loss in the quarter reflects its strategy to align its cost structure with revenue expectations, and is indicative of the disciplined management practices implemented to attain positive cash flow and profitability. Cardiovascular Systems Inc. - Earnings Surprise | FindTheCompany Quarter in DetailsRevenues dipped 1% year over year to $44.5 million (excluding Asahi Guide wire sales last year), but remained ahead of the company’s guidance range of $40.5–$42 million. The top line also exceeded the Zacks Consensus Estimate of $42 million.During the third quarter, Cardiovascular sold over 13,000 devices, representing 92% of revenues. Coronary product revenues improved 31% to $10.5 million. Peripheral revenue demonstrated a 3% sequential increase, led by growth below the knee. In the quarter, the company added 44 new peripheral accounts and 53 coronary accounts.MarginGross margin in the reported quarter was 80.4% (ahead of the company’s target), up 254 basis points year over year, primarily due to unit cost reductions.Meanwhile, selling and administrative expenses increased 7.3% to $42.3 million, while research and development expenses decreased 26.1% to $5.7 million. The resultant adjusted operating expenses rose 1.8% to $48.1 million. Consequently, operating loss deteriorated 16% to $12.1 million.Financial PositionThe company’s cash and cash equivalents were $62.1 million in the fiscal third quarter, compared to $65.3 million at the end of the fiscal second quarter.OutlookCardiovascular has provided its fourth-quarter fiscal 2016 guidance. The company expects revenues in the range of $45–$46.5 million. Moreover, the company anticipates gross margin of 80% in the fourth quarter.On the bottom-line front, the company expects to deliver net loss in the range of $5.9–$6.9 million or loss per share of 18–21 cents, assuming 32.7 million average shares outstanding.Our TakeCardiovascular Systems ended the third quarter of fiscal 2016 on a promising note. Loss incurred was narrower than expected and below our projection. Also, the year-over-year improvement was encouraging. Moreover, after a dismal second quarter, the improving top-line performance was a positive. We are encouraged to find the improved stability in the company’s territories combined with continued focus and increased success determining high volume of comps translated into better sales productivity.Moreover, management is optimistic about engineering enhancements and higher production volumes, which may continue to reduce unit cost for the company in the quarters ahead. We believe this will result in higher gross margin realization for Cardiovascular Systems.Zacks RankCardiovascular currently has a Zacks Rank #3 (Hold). Some better-ranked medical products stocks are Baxter International Inc. BAX, Capricor Therapeutics, Inc. CAPR and Cardica Inc. CRDC. All the three stocks hold a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BAXTER INTL (BAX): Free Stock Analysis Report CARDICA INC (CRDC): Free Stock Analysis Report CAPRICOR THERAP (CAPR): Free Stock Analysis Report CARDIOVASCLR SY (CSII): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research