Medical device tax helps push Spectranetics further into the red in Q1

Spectranetics logo

Colorado-based medical device maker Spectranetics (NSDQ:SPNC) broke out the red ink in 2013, blaming the swing partly on the newly implemented medtech excise tax, which requires that companies pay a 2.3% levy on all U.S. sales of applicable medical devices.

Spectranetics shifted from a net positive the last 4 quarters to a net loss for its 1st quarter of 2013, which the company said was due in part to the $522,000 it paid in compliance with the newly implemented tax. Other costs that slashed the company’s bottom line included $366,000 in contingent consideration and acquisition-related intangible asset amortization.

The news sent SPNC shares tumbling 8.9% on Wall Street today, where they were trading at $17.56 as of about 12:10 p.m. despite strong growth and earnings in line with analysts’ expectations.

In total Spectranetics reported $959,000 in losses, or 3¢ per share, on sales of $37.7 million during its 1st quarter of 2013. That’s a 13.2% increase in sales compared with the same period last year, when the company reported revenues of $33.3 million and $12,000 in profit.

The company lumped the medical device tax in with other 1-time costs, excluding it from adjusted earnings calculations and projections. Childs told investors this week that Spectranetics will continue to carve the tax out of its EBITDA estimates for the remainder of 2013, but will cease to do so once the tax anniversaries in January 2014.

"We recorded $0.5 million related to the medical device excise tax, which became effective on January 1, 2013," CFO Guy Childs said during a conference call with investors. "We support the ongoing effort to repeal the tax, but our outlook assumes the tax will remain in place."

The company saw healthy growth in its primary product lines, reporting a 5% boost to $17.2 million in revenue for its vascular intervention business, a 22% boost to $15.1 million for lead management products and a 20% boost to $5.4 million for its laser systems, services and other products.

Excluding 1-time costs, acquisition expenses and the impact of the medical device tax, Q1 adjusted earnings amounted to $1.8 million, compared with adjusted earnings of $2.5 million reported for the same period last year.

Spectranetics expects to pay about $2.5 million in 2013 in compliance with the medical device tax, which the company says affects "a majority of our U.S. sales." The device maker maintained previous projections for 2013, expecting a 9%-11% uptick in sales and between a net break-even or 1¢ per-diluted-share profit.

RSS From Medical Design & Outsourcing

  • Athermal laser machining cuts bioabsorbable polymers and more
    A the recent MD&M East trade show in New York, Norman Noble, discussed the capability of athermal laser manufacturer. The company has developed the Noble S.T.E.A.L.T.H. (System To Enable Ablation Laser Technology Haz-free). The athermal laser machining process was developed to create precise features in any material, including bioabsorbable polymers, shape memory metals and other […]
  • Exciting possibilities for metallic glass in the medical device world
    Researchers are exploring the potential of metallic glass as a versatile, pliable material that is stronger than steel, with a bevy of possible medical device applications. Yale University engineers have discovered a unique method for designing metallic glass nanostructures across a wide range of chemicals, a technique that could have applications for everything from watch […]
  • Strong Precision Technologies’ medical divisions to unify under MedTorque brand
    Strong Precision Technologies announced on July 2, 2015, that its two medical divisions will now go to market under a single brand, MedTorque. The move reflects the increasing integration of the division formerly known as Inland Midwest with MedTorque, its sister division in Kenosha, WI. “We will continue providing our customers with the personalized level of service […]
  • Olympus offers next-day product replacement guarantee for medical devices
    Olympus, a medical and surgical procedures solutions company, announced that it is guaranteeing next-day replacements for surgical equipment at no additional charge. Olympus is the first surgical product manufacturer to offer this type of guarantee. The service became available to customers with an Olympus Full Service Agreement earlier this year. “Canceled procedures can be costly for healthcare facilities […]
  • More accurate prediction on prognosis in multiple myeloma from SkylineDx
    SkylineDx, a biotechnology company specializing in the development and commercialization of genetic tests, is launching its MMprofiler assay. This test enables clinicians to more accurately predict the prognosis of patients with multiple myeloma (bone marrow cancer) than traditional methods. The MMprofiler measures the activity of 92 genes which are directly or indirectly related to the […]
  • Flint Mobile swaps card reader for camera, accept mobile payments anywhere
    Flint Mobile, the swipe-free mobile payments app, has significantly expanded its payment management and loyalty capabilities for small, service-centric businesses, like the ones run by on-the-go medical equipment professionals. The toggle-free mobile technology makes the process quite simple for both parties, as all transactions are conducted through the mobile device’s camera without the need of any external […]
  • Should scientists be allowed to genetically alter human embryos?
    Scientists have at their disposal, a way to explore the possible prevention of genetic diseases before birth. But should they? Currently, the most promising path forward involves editing the genes of human embryos, a procedure threaded with controversy. An article in “Chemical & Engineering News” (C&EN), the weekly newsmagazine of the American Chemical Society (ACS), parses […]
  • Tackling chronic sinusitis by addressing underlying factors
    The stuffy noses and sinus pressure of head colds are uncomfortable, but for most people, they go away within days. For those with chronic sinusitis, however, those symptoms and others drag on for weeks. Now scientists are onto a potential new therapy that could address one of the underlying factors associated with the condition. They […]
  • Implantable “artificial pancreas” could help diabetes patients control their blood sugar
    Living with Type 1 diabetes requires constant monitoring of blood sugar levels and injecting insulin daily. Now scientists are reporting in the American Chemical Society (ACS) journal, “Industrial & Engineering Chemistry Research,” the development of an implantable “artificial pancreas” that continuously measures a person’s blood sugar or glucose level and can automatically release insulin as […]
  • Drug Deactivation program roll out to all facilities for safe disposal of unused prescription medications
    Verde Technologies announced that New Brighton-based Meridian Behavioral Health, the largest for-profit substance abuse and addiction treatment group in Minnesota, has become its most recent partner in the deactivation and safe disposal of prescription medications including methadone. Meridian is the first behavioral health group to roll out the Deterra Drug Deactivation System to all 17 […]
  • Lophius Biosciences introduces T-activated ImmunoScan Cocktail
    Lophius Biosciences announced the commercial launch of T-Track ImmunoScan and T-activated ImmunoScan Cocktail. Based on a proprietary and very specific cocktail of stimulants in combination with the Company’s T-activation technology, T-Track ImmunoScan and T-activated ImmunoScan Cocktail specifically target different cell types involved in both the adaptive and innate immune system. T-Track ImmunoScan and the T-activated […]

Leave a Reply