ARDEN HILLS, Minn., May 10, 2021 (GLOBE NEWSWIRE) —

Intricon Corporation (NASDAQ: IIN)

, an international company engaged in designing, developing, engineering, manufacturing, and packaging miniature interventional, implantable and body-worn medical devices, today announced financial results for its first quarter ended March 31, 2021.

First Quarter Highlights:

• Revenue of $31.8 million increased $10.3 million compared to $21.5 million in the prior year period
• Gross margin of 25.8%, compared to 21.3% in the prior year period
• GAAP net income of $0.7 million or $0.07 per diluted share versus net loss of $2.0 million or $0.22 per diluted share in the prior year period
• Non-GAAP adjusted net income of $2.5 million or $0.26 per diluted share in the first quarter of 2021, versus a net loss of $0.7 million or $0.08 per diluted share, for the 2020 first quarter
• As of March 31, 2021, the company had $38.3 million of cash and investment securities, compared to $33.5 million as of December 31, 2020
• Appointed Kathleen Pepski to Board of Directors

“Our first quarter results illustrate a strong start to the year despite some ongoing pandemic related headwinds. Encouragingly, we saw meaningful year-over-year improvement throughout our business driven by pent up demand from Medtronic’s diabetes business and strong Hearing Health revenues in our legacy OEM business. In addition, Emerald Medical Services (EMS) continued to grow at a pace that exceeded our initial expectations, contributing $3.8 million to our topline in the first quarter,” said Scott Longval, President and Chief Executive Officer.

“As we enter the second quarter, there remains lingering impacts from COVID-19, including staffing challenges coupled with input supply constraints primarily associated with the February Texas storms. I am confident that with our constant focus on strong execution we will overcome these short-term challenges to deliver solid year over year growth,” Longval concluded.

First Quarter 2021 Financial Results

Revenue

Net revenue for the fiscal year 2021 first quarter increased 48% to $31.8 million versus $21.5 million in the comparable prior-year period.

Revenue in Intricon’s Medical business increased 54% to $25.1 million from $16.4 million in the comparable prior-year period. The year-over-year increase was driven primarily by higher diabetes revenues from increased demand for products as COVID-19 restrictions eased as well as the impact of EMS, which the company acquired in May 2020.

Hearing Health revenue increased 46% to $5.7 million in the first quarter of 2021 compared to $3.9 million in the prior-year quarter. The primary growth driver in this market was our legacy hearing health business, which continued to benefit from increased access to audiologists as restrictions were lifted. We also saw revenue contributions in our Indirect to End Consumer market, related to volumes required to support an initial OTC pilot.

Gross Margin and Operating Expenses

Gross margin in the first quarter of 2021 was 25.8%, compared to 21.3% in the prior-year first quarter, primarily due to higher volumes and product mix.

Operating expenses for the first quarter were $7.4 million, compared to $6.6 million in the comparable prior-year period. The increase was due to $0.9 million of expenses associated with higher wages, salaries, incentives, and stock-based compensation expense, $0.6 million in EMS operating expenses, and $0.4 million of additional amortization expense of certain intangible assets, partially offset by a $1.1 million reduction in Hearing Help Express operating expenses due to the second quarter 2020 restructuring.

GAAP Net Income

The company posted GAAP net income of $0.7 million or $0.07 per diluted share in the first quarter of 2021, versus a net loss of $2.0 million or $0.22 per diluted share, for the 2020 first quarter.

Non-GAAP Income

The company posted non-GAAP adjusted net income of $2.5 million or $0.26 per diluted share in the first quarter of 2021, versus a net loss of $0.7 million or $0.08 per diluted share, for the 2020 first quarter. See “Reconciliation of Adjusted Net Income and Earnings Per Share” in the tables that follow.

Guidance


Intricon expects full year 2021 revenue to range between $119 million and $123 million, representing year-over-year growth of 16-20%. We do not anticipate providing regular quarterly guidance.  However, we do expect our second quarter revenue to slightly lag our first quarter results due to COVID-19 related pent up demand recognized in the first quarter of 2021 and present challenges regarding staffing and input supply constraints.

Conference Call


Intricon will hold a conference call today, May 10, 2021, beginning at 4:00 p.m. CT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by dialing 866-795-7248 for domestic callers or 470-495-9160 for international callers, using conference ID: 9769435. A live and archived webcast will be available on the “Investors” sections of the company’s website at: www.Intricon.com.

Use of non-GAAP Adjusted Financial Measures


This press release contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP measures include:

• Adjusted net income
• Adjusted net income per diluted share

These non-GAAP financial measures reflect adjustments for expenses and gains that the company believes do not reflect the company’s core operating performance. We have presented these non-GAAP financial measures because we believe this presentation, when reconciled to the corresponding GAAP measures, provides useful information to investors in evaluating the company’s operational performance. Management uses these non-GAAP measures internally to evaluate our performance and in making financial, operational and planning decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results and trends. The company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in comparing the company’s financial results with the financial results of other companies.

The company periodically reassesses the components of our non-GAAP adjustments for changes in how we evaluate our performance, changes in how we make financial and operational decisions, and considers the use of these measures by our competitors and peers to ensure the adjustments are still relevant and meaningful.

Non-GAAP financial measures should not be used as a substitute for GAAP measures, or considered in isolation, for the purpose of analyzing our operating performance. The presentation of these non-GAAP financial measures should not be construed as an inference that future results will not be affected by similar items.

Forward-Looking Statements


Statements made in this release and in Intricon’s other public filings and releases that are not historical facts or

that include forward-looking terminology, including estimates of future results, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be affected by known and unknown risks, uncertainties and other factors that are beyond Intricon’s control, including without limitation, the impacts of the COVID-19 pandemic and measures taken in response, and may cause Intricon’s actual results, performance or achievements to differ materially from the results, performance and achievements expressed or implied in the forward-looking statements. These risks, uncertainties and other factors are detailed from time to time in the company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2020. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.

About Intricon Corporation


Intricon is a Joint Development Manufacturer that integrates components and assemblies to advance micro-medical technology across a range of device platforms for global customers. Intricon approaches each engagement with an all-in commitment, working with customers every step of the way- from the earliest idea stages to ongoing production – in order to advance program performance and deliver results. With a focus on key device platforms, Intricon helps advance clinical outcomes by always looking ahead with proactive support and resources through integration of its core competencies. Intricon has facilities in the United States, Asia and Europe. The company’s common stock trades under the symbol “IIN” on the NASDAQ Global Market.

Investor Contact


Leigh Salvo

(415) 937-5404


[email protected]