Cardiovascular Systems (NSDQ:CSII) said yesterday that it’s planning to lay of 8% of its workforce even as it reported preliminary fiscal 3rd-quarter sales numbers that beat both its own forecast and the consensus expectation on Wall Street.
The company said it expects to post sales of $43.5 million to $44 million for the 3 months ended yesterday, roughly 4% to5% above its prior guidance of $40.5 million to $42 million and well ahead of The Street’s $41 million forecast.
St. Paul, Minn.-based CSI said the layoffs – and the departure early this month of former CEO David Martin due to a cancer diagnosis – will mean a $4.5 million charge during its 3rd quarter. Another $8 million charge will cover the settlement of a False Claims Act lawsuit based on allegations from a former sales rep that the company ran kickbacks and an off-label marketing scheme to boost sales of its orbital atherectomy devices.
“As we discussed on our 2nd-quarter earnings call, our immediate focus is to stabilize our sales force and resume sequential quarterly revenue growth. We’ve made solid progress on these goals, resulting in revenues exceeding guidance for the 3rd quarter of this fiscal year. We also discussed our longer-term effort of positioning CSI for profitability and positive cash flow. The restructuring announced today is a significant step in achieving these goals,” chairman, president & interim CEO Scott Ward said in prepared remarks.
CSI said it’s due to release its full fiscal 3rd-quarter results May 4.
CSII shares closed up 2.3% at $10.37 apiece yesterday and gained another 1.4%, to $10.51 each, in after-hours trading.