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

  • Teknor Apex to showcase wide range of PVC compounds for medical devices at Medtec China
    Building on its international leadership role as a supplier of medical-grade PVC compounds, Teknor Apex Company has developed flexible and rigid formulations that address the special needs of device manufacturers. The company will highlight these capabilities at Medtec China 2015. “Teknor Apex produces or markets medical-grade PVC compounds in China, Singapore, Europe, and the United […]
  • The Raspberry Pi eco-system goes interstellar with the new Raspberry Pi Sense HAT
    Newark element14 has globally launched the latest addition to the expanding ecosystem of Raspberry Pi accessories, the Raspberry Pi Sense HAT, as featured in the ‘Astro Pi’ space mission. The Sense HAT will enable enthusiasts to control the same hardware used in space. The Sense HAT attaches to the Raspberry Pi board, and can be […]
  • CommScope completes acquisition of TE Connectivity’s Telecom
    CommScope Holding Company, has completed its previously announced acquisition of TE Connectivity’s Telecom, Enterprise and Wireless businesses, a leader in fiber optic connectivity for wireline and wireless networks. The all-cash transaction, valued at approximately $3 billion, strengthens CommScope’s position as a leading communications infrastructure provider with deeper resources to meet the world’s growing demand for network […]
  • SPI awards IKO Prosthetic Creative System the Student Design International Design Excellence Award
    SPI: The Plastics Industry Trade Association congratulated IKO Prosthetic Creative System for winning the SPI Student Design Award, part of the Industrial Designers Society of America’s (IDSA’s) International Design Excellence Awards (IDEA) program. The award was presented to IKO, an innovative, youth-focused prosthetic design company led by Chicago-based designer Carlos Torres, by SPI’s Senior Director of […]
  • New assay could revolutionize diagnosis and treatment of life-threatening disease
    Invasive Fungal Disease (IFD) is an emerging global health problem associated with high mortality rates in severely immunocompromised patients, such as those undergoing intensive chemotherapy or stem cell transplantation, and in patients suffering immune compromising conditions such as AIDS. The most common causative agents of this disease have been identified as Candida and Aspergillus species, […]
  • Molex delivers ISO 13485-compliant, medical-grade surgical cables from its class 100,000 clean room facility
    Molex, LLC operates a fully ISO 146441-1:1999 Class 8-certified clean room, satisfying strict particulate contamination levels specified by ISO-compliant requirements. Located in Thailand, the facility has less than 100,000 particulates (≥0.5µm) per cubic foot of air and manufactures a variety of ISO 13485-compliant medical cables and surgical cables used in operating theatres, hospitals, laboratories and […]
  • Swept-Source OCT: Patent license agreement between Massachusetts General Hospital and Heidelberg Engineering
    Heidelberg Engineering has entered into a patent license agreement with Massachusetts General Hospital (MGH) in Boston. The agreement grants global and exclusive rights to 77 basic patents and patent applications which relate to swept-source OCT technology and its application in ophthalmology. Spectral domain OCT has become indispensable to eye care professionals worldwide to diagnose and […]
  • MIT’s MultiFab presents a stark challenge to incumbent 3D Printer manufacturers’ hardware, software, and business Models
    MIT’s Computational Fabrication Group recently announced the MultiFab, a low-cost 3D printer that can combine up to 10 different resins in one part and also includes a 3D scanning system to identify and fix errors during production. According to Lux Research, these capabilities are rare in commercial 3D printers today due to the manufacturers’ need […]
  • AVX releases Accu-P MP medical grade film chip capacitors for medical devices
    AVX Corporation, a leading manufacturer of passive components and interconnect solutions, has released a new series of thin film chip capacitors specifically designed to meet the demanding performance specifications for implantable medical devices. Delivering extremely tight capacitive tolerances, exceptionally repeatable performance, and remarkably low ESR and high Q at high frequencies—including VHF, UHF, and RF […]
  • RIVANNA commences manufacturing of its Accuro device
    Rivanna Medical announced that it has begun manufacturing its FDA-cleared Accuro device, a handheld and untethered smart-phone-sized device that is designed to guide spinal anesthesia with automated 3D navigation technology in addition to ultrasound imaging of abdominal, musculoskeletal, cardiac and peripheral vascular anatomies. The product will be launched at the ASA annual meeting in San […]
  • FDA seeks public input on Quality Metrics guidance
    by Oliver Wolf, Senior Product Manager, MasterControl In line with the general shift towards risk-driven approaches in the quality management world, FDA is now taking steps towards applying those same principles to its own auditing schedule. At the end of July, the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation […]

Leave a Reply