Company Quick10K Filing
Cardiovascular Systems
Price48.50 EPS-0
Shares35 P/E-542
MCap1,707 P/FCF1,775
Net Debt-59 EBIT-1
TEV1,648 TEV/EBIT-1,351
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-07
10-Q 2019-12-31 Filed 2020-02-06
10-Q 2019-09-30 Filed 2019-10-31
10-K 2019-06-30 Filed 2019-08-23
10-Q 2019-03-31 Filed 2019-05-03
10-Q 2018-12-31 Filed 2019-02-01
10-Q 2018-09-30 Filed 2018-11-02
10-K 2018-06-30 Filed 2018-08-23
10-Q 2018-03-31 Filed 2018-05-04
10-Q 2017-12-31 Filed 2018-02-09
10-Q 2017-09-30 Filed 2017-11-03
10-K 2017-06-30 Filed 2017-08-24
10-Q 2017-03-31 Filed 2017-05-05
10-Q 2016-12-31 Filed 2017-02-03
10-Q 2016-09-30 Filed 2016-11-04
10-K 2016-06-30 Filed 2016-08-25
10-Q 2016-03-31 Filed 2016-05-06
10-Q 2015-12-31 Filed 2016-02-02
10-Q 2015-09-30 Filed 2015-11-06
10-K 2015-06-30 Filed 2015-08-27
10-Q 2015-03-31 Filed 2015-05-08
10-Q 2014-12-31 Filed 2015-02-06
10-Q 2014-09-30 Filed 2014-11-07
10-K 2014-06-30 Filed 2014-08-28
10-Q 2014-03-31 Filed 2014-05-08
10-Q 2013-12-31 Filed 2014-02-07
10-Q 2013-09-30 Filed 2013-11-04
10-K 2013-06-30 Filed 2013-09-11
10-Q 2013-03-31 Filed 2013-05-09
10-Q 2012-12-31 Filed 2013-02-08
10-Q 2012-09-30 Filed 2012-11-08
10-K 2012-06-30 Filed 2012-09-10
10-Q 2012-03-31 Filed 2012-05-08
10-Q 2011-12-29 Filed 2012-02-09
10-Q 2011-09-30 Filed 2011-11-08
10-K 2011-06-30 Filed 2011-09-12
10-Q 2011-03-31 Filed 2011-05-13
10-Q 2010-12-31 Filed 2011-02-11
10-Q 2010-09-30 Filed 2010-11-12
10-K 2010-06-30 Filed 2010-09-28
10-Q 2010-03-31 Filed 2010-05-14
10-Q 2009-12-31 Filed 2010-02-12
8-K 2020-06-19
8-K 2020-06-16
8-K 2020-06-09
8-K 2020-05-05
8-K 2020-04-01
8-K 2020-03-26
8-K 2020-03-18
8-K 2020-02-05
8-K 2019-11-13
8-K 2019-11-12
8-K 2019-10-29
8-K 2019-09-26
8-K 2019-08-30
8-K 2019-08-06
8-K 2019-08-05
8-K 2019-07-24
8-K 2019-07-01
8-K 2019-05-01
8-K 2019-01-30
8-K 2019-01-09
8-K 2019-01-07
8-K 2018-11-14
8-K 2018-10-30
8-K 2018-08-15
8-K 2018-07-31
8-K 2018-07-30
8-K 2018-07-14
8-K 2018-05-02
8-K 2018-03-23
8-K 2018-03-12
8-K 2018-02-12
8-K 2018-02-06
8-K 2018-01-31
8-K 2018-01-12
8-K 2018-01-10

CSII 10Q Quarterly Report

Part I. - Financial Information
Item 1. Consolidated Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 a1010amendmentno2topro.htm
EX-10.2 a102formofboardrestric.htm
EX-10.3 a103formofboardrsuagre.htm
EX-10.4 a104formofboardrsuagre.htm
EX-10.5 a105formofperformance-.htm
EX-10.6 a106formoftime-vestres.htm
EX-10.7 a107formofstockoptiona.htm
EX-10.8 a108csisvbfirstamendme.htm
EX-10.9 a109amendmentno2tosupp.htm
EX-10.10 a101amendedandrestated.htm
EX-31.1 a10-qex311.htm
EX-31.2 a10-qex312.htm
EX-32.1 a10-qex321.htm
EX-32.2 a10-qex322.htm

Cardiovascular Systems Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
0.30.20.20.10.10.02012201420172020
Assets, Equity
0.10.10.0-0.0-0.1-0.12012201420172020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

csii-20200331
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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _____________________________________________________
 FORM 10-Q
 _____________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 000-52082
 ____________________________________________________
CARDIOVASCULAR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
 ____________________________________________________
Delaware 41-1698056
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1225 Old Highway 8 Northwest
St. Paul, Minnesota 55112-6416
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (651259-1600
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, One-tenth of One Cent ($0.001) Par Value Per ShareCSIIThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
The number of shares outstanding of the registrant’s Common Stock, $0.001 par value per share, as of May 1, 2020 was: 35,274,437 shares.


Table of Contents

Cardiovascular Systems, Inc.
Table of Contents
 
 PAGE



Table of Contents
PART I. — FINANCIAL INFORMATION
 
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cardiovascular Systems, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share and share amounts)
(Unaudited)
 
March 31,
2020
June 30,
2019
ASSETS
Current assets
Cash and cash equivalents$69,572  $74,237  
Marketable securities37,688  48,435  
Accounts receivable, net30,864  36,015  
Inventories24,069  18,058  
Prepaid expenses and other current assets2,243  3,330  
Total current assets164,436  180,075  
Property and equipment, net27,692  27,324  
Intangible assets, net20,256  5,105  
Other assets7,694  6,073  
Total assets$220,078  $218,577  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$13,235  $11,194  
Accrued expenses35,064  29,387  
Deferred revenue1,757  1,764  
Total current liabilities50,056  42,345  
Long-term liabilities
Financing obligation20,868  20,972  
Deferred revenue5,258  6,541  
Other liabilities720  775  
Total liabilities76,902  70,633  
Commitments and contingencies (see Note 10)
Common stock, $0.001 par value; authorized 100,000,000 common shares; issued and outstanding 35,274,479 at March 31, 2020 and 34,934,569 at June 30, 2019, respectively
34  34  
Additional paid in capital491,053  477,368  
Accumulated other comprehensive (loss) income(59) 78  
Accumulated deficit(347,852) (329,536) 
Total stockholders’ equity143,176  147,944  
Total liabilities and stockholders’ equity$220,078  $218,577  
The accompanying notes are an integral part of these unaudited consolidated financial statements.

2

Table of Contents
Cardiovascular Systems, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share and share amounts)
(Unaudited)
 
 Three Months EndedNine Months Ended
March 31,March 31,
 2020201920202019
Net revenues$61,175  $63,311  $193,999  $179,783  
Cost of goods sold12,225  12,166  38,615  34,218  
Gross profit48,950  51,145  155,384  145,565  
Expenses:
Selling, general and administrative41,384  41,356  135,003  123,705  
Research and development9,964  9,155  31,515  23,702  
Amortization of intangible assets337  127  908  235  
Total expenses51,685  50,638  167,426  147,642  
(Loss) income from operations(2,735) 507  (12,042) (2,077) 
Other (income) expense, net:
Interest expense501  420  1,473  1,266  
Interest income and other, net(394) (671) (1,574) (1,771) 
Total other (income) expense, net107  (251) (101) (505) 
(Loss) income before income taxes(2,842) 758  (11,941) (1,572) 
Provision for income taxes47  86  129  152  
Net (loss) income$(2,889) $672  $(12,070) $(1,724) 
Basic earnings per share$(0.08) $0.02  $(0.35) $(0.05) 
Diluted earnings per share$(0.08) $0.02  $(0.35) $(0.05) 
Basic weighted average shares outstanding34,149,561  33,600,148  34,029,296  33,510,368  
Diluted weighted average shares outstanding34,149,561  34,241,432  34,029,296  33,510,368  
The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

Table of Contents
Cardiovascular Systems, Inc.
Consolidated Statements of Comprehensive Income
(Dollars in thousands)
(Unaudited)

Three Months EndedNine Months Ended
March 31,March 31,
2020201920202019
Net (loss) income$(2,889) $672  $(12,070) $(1,724) 
Other comprehensive (loss) income:
Unrealized loss on available-for-sale debt securities(152) —  (137) —  
Comprehensive (loss) income$(3,041) $672  $(12,207) $(1,724) 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4

Table of Contents
Cardiovascular Systems, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
(Dollars in thousands, except per share amounts)
(Unaudited)

 Common StockAdditional
Paid  In
Capital
Accumulated Other Comprehensive Income (Loss) Accumulated
Deficit
Total
 
Balances at June 30, 2019$34  $477,368  $78  $(329,536) $147,944  
Stock-based compensation related to restricted stock awards, net—  3,804  —  —  3,804  
Shares withheld for payroll taxes—  —  —  (5,506) (5,506) 
Employee stock purchase plan activity—  242  —  —  242  
Unrealized gain on available-for-sale debt securities—  —  24  —  24  
Stock issued for acquisitions—  1,346  —  —  1,346  
Net loss—  —  —  (5,780) (5,780) 
Balances at September 30, 201934  482,760  102  (340,822) 142,074  
Stock-based compensation related to restricted stock awards, net—  3,091  —  —  3,091  
Shares withheld for payroll taxes—  —  —  (379) (379) 
Employee stock purchase plan activity—  1,929  —  —  1,929  
Unrealized loss on available-for-sale debt securities—  —  (9) —  (9) 
Net loss—  —  —  (3,401) (3,401) 
Balances at December 31, 201934  487,780  93  (344,602) 143,305  
Stock-based compensation related to restricted stock awards, net  2,934      2,934  
Shares withheld for payroll taxes      (361) (361) 
Employee stock purchase plan activity  339      339  
Unrealized loss on available-for-sale debt securities—  —  (152) —  (152) 
Net loss      (2,889) (2,889) 
Balances at March 31, 2020$34  $491,053  $(59) $(347,852) $143,176  

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Cardiovascular Systems, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
(Dollars in thousands, except per share amounts)
(Unaudited)

 Common StockAdditional
Paid  In
Capital
Accumulated
Other
Comprehensive
Income
Accumulated
Deficit
Total
 
Balances at June 30, 2018$33  $461,927  $101  $(327,591) $134,470  
Impact from adoption of ASU 2016-01 (See Note 7)—  —  (101) 101  —  
Stock-based compensation related to restricted stock awards, net—  3,132  —  —  3,132  
Shares withheld for payroll taxes—  —  —  (1,058) (1,058) 
Employee stock purchase plan activity—  252  —  —  252  
Exercise of stock options at $8.75 per share—  71  —  —  71  
Net loss—  —  —  (2,888) (2,888) 
Balances at September 30, 201833  465,382  —  (331,436) 133,979  
Stock-based compensation related to restricted stock awards, net1  2,471  —  —  2,472  
Shares withheld for payroll taxes—  —  —  (319) (319) 
Employee stock purchase plan activity—  1,849  —  —  1,849  
Exercise of stock options at $8.75 per share—  125  —  —  125  
Net income—  —  —  492  492  
Balances at December 31, 201834  469,827  —  (331,263) 138,598  
Stock-based compensation related to restricted stock awards, net  2,380      2,380  
Shares withheld for payroll taxes—  —  —  (331) (331) 
Employee stock purchase plan activity—  294  —  —  294  
Net income      672  672  
Balances at March 31, 2019$34  $472,501  $  $(330,922) $141,613  

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Cardiovascular Systems, Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 
 Nine Months Ended
March 31,
 20202019
Cash flows from operating activities
Net loss$(12,070) $(1,724) 
Adjustments to reconcile net loss to net cash from operating activities
Depreciation of property and equipment2,244  2,382  
Amortization of intangible assets908  235  
Write-off of patent costs917  500  
Provision for doubtful accounts600  125  
Stock-based compensation10,469  8,600  
Accretion of discount on marketable securities(145) —  
Changes in assets and liabilities
Accounts receivable4,551  (3,870) 
Inventories(6,011) (2,699) 
Prepaid expenses and other assets1,310  647  
Accounts payable1,995  1,915  
Accrued expenses and other liabilities(4,902) 144  
Deferred revenue(1,290) (1,347) 
Net cash (used in) provided by operating activities(1,424) 4,908  
Cash flows from investing activities
Purchases of property and equipment(2,138) (2,286) 
Acquisitions(5,741) —  
Purchase of investments(750) (3,055) 
Purchases of marketable securities(17,968) —  
Sales of marketable securities4,890  97  
Maturities of marketable securities23,800  —  
Costs incurred in connection with patents(717) (665) 
Net cash provided by (used in) investing activities1,376  (5,909) 
Cash flows from financing activities
Proceeds from employee stock purchase plan1,687  1,551  
Payments of employee taxes related to vested restricted stock(6,246) (1,708) 
Exercise of stock options —  196  
Principal payments made on financing obligation(58) (18) 
Net cash (used in) provided by financing activities(4,617) 21  
Net change in cash and cash equivalents(4,665) (980) 
Cash and cash equivalents
Beginning of period74,237  116,260  
End of period$69,572  $115,280  
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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CARDIOVASCULAR SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(For the Nine Months Ended March 31, 2020 and 2019)
(Dollars in thousands, except per share and share amounts)
(Unaudited)

1. Basis of Presentation

Cardiovascular Systems, Inc. (the “Company”), based in St. Paul, Minnesota, is a medical device company focused on developing and commercializing innovative solutions for treating vascular and coronary disease. The Company’s Orbital Atherectomy Systems (“OAS”) treat calcified and fibrotic plaque in arterial vessels throughout the leg and heart in a few minutes of treatment time, and address many of the limitations associated with existing surgical, catheter and pharmacological treatment alternatives. 

The Company prepared the unaudited interim consolidated financial statements and related unaudited financial information in the footnotes in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. The year-end consolidated balance sheet was derived from the Company’s audited consolidated financial statements, but does not include all disclosures as required by GAAP. These interim consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the Company’s consolidated financial position, the results of its operations, its changes in stockholders’ equity, and its cash flows for the interim periods. These interim consolidated financial statements should be read in conjunction with the consolidated annual financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2019. The nature of the Company’s business is such that the results of any interim period may not be indicative of the results to be expected for the entire year.

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company has been impacted by the outbreak of COVID-19. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company's business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19, as well as the economic impact on the Company's customers and markets. The Company has made estimates of the impact of COVID-19 within these consolidated financial statements and there may be changes to those estimates in future periods. Actual results could differ from those estimates.

2. Selected Consolidated Financial Statement Information

Accounts Receivable, Net

Accounts receivable consists of the following:
March 31,June 30,
20202019
Accounts receivable$31,935  $36,628  
Less: Allowance for doubtful accounts(1,071) (613) 
   Accounts receivable, net$30,864  $36,015  


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Inventories

Inventories consist of the following:
March 31,June 30,
20202019
Raw materials$7,752  $5,547  
Work in process2,533  1,415  
Finished goods13,784  11,096  
   Inventories$24,069  $18,058  

Property and Equipment, Net

Property and equipment consists of the following:
March 31,June 30,
20202019
Land$572  $572  
Building22,420  22,420  
Equipment18,235  17,517  
Furniture3,207  2,975  
Leasehold improvements663  540  
Construction in progress2,855  1,328  
47,952  45,352  
Less: Accumulated depreciation(20,260) (18,028) 
Property and equipment, net$27,692  $27,324  

Accrued Expenses

Accrued expenses consist of the following:
March 31,June 30,
20202019
Acquisition consideration$9,829  $  
Salaries and bonus6,908  11,105  
Accrued vacation5,043  4,230  
Commissions4,689  6,829  
Accrued excise, sales and other taxes2,492  3,349  
Clinical studies2,639  2,092  
Other accrued expenses3,464  1,782  
Accrued expenses$35,064  $29,387  


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3. Revenue

The following table disaggregates the Company’s net revenues by product category and geography for the following periods:
Three Months EndedNine Months Ended
March 31,March 31,
Product Category2020201920202019
Peripheral$42,627  $45,152  $135,736  $130,620  
Coronary18,548  18,159  58,263  49,163  
Total net revenues$61,175  $63,311  $193,999  $179,783  
Geography
United States$58,122  $60,897  $185,611  $174,417  
International 3,053  2,414  8,388  5,366  
Total net revenues$61,175  $63,311  $193,999  $179,783  

Revenue of $1,290 was recognized in the nine months ended March 31, 2020 that was deferred as of June 30, 2019. As of March 31, 2020 and June 30, 2019, the Company had a liability of $1,929 and $1,958, respectively, related to estimates of variable consideration which are recorded within accounts payable on the consolidated balance sheet.

4. Acquisition

On August 5, 2019, the Company acquired the WIRION Embolic Protection System and related assets from Gardia Medical Ltd. ("Gardia"), a wholly owned Israeli subsidiary of Allium Medical Solutions Ltd., for a total purchase price of $16,687. The device, which received CE Mark in June 2015 and FDA clearance in March 2018, is a distal embolic protection filter used to capture debris that can be associated with all types of peripheral vascular intervention procedures. The Company acquired the device to expand its portfolio of products for physicians that treat complex peripheral arterial disease.

Upon closing, the Company made an initial $5,600 cash payment, net of transaction expenses, and issued Gardia 31,493 shares of common stock of the Company valued at $1,346. Following the successful completion of the manufacturing transfer of the WIRION system to the Company, the Company has agreed to pay Gardia an additional $10,000, half of which may be paid by the Company through an additional issuance of shares of common stock. The Company has accounted for this transaction as an asset acquisition resulting in developed technology of $15,624 and a trade name of $760, both recognized as a component of intangible assets, net within the Company's consolidated balance sheet. The remainder of the purchase price was recognized in property and equipment.

The purchase also includes a performance milestone payment to Gardia equal to $3,000 for each $10,000 in net revenues recognized by the Company from sales of the WIRION system for applications above-the-knee in excess of $30,000 during the 36 month period beginning on the earlier of the first commercial sale of the system by the Company or six months following successful manufacturing transfer. If payment of the performance milestone becomes probable, these additional costs will be added to the carrying value of the acquired assets.

5. Intangible Assets

The Company’s finite-lived intangible assets are stated at cost less accumulated amortization and include developed technology and trade name assets acquired in the asset acquisition discussed in Note 4, as well as costs incurred to obtain patents. Developed technology and trade name assets are amortized over 15 years. Patent costs are amortized beginning at the time of patent approval over a useful life not exceeding 20 years.


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The components of intangible assets, net are as follows:
March 31, 2020June 30, 2019
Gross Carrying AmountAccumulated AmortizationNet Book ValueGross Carrying AmountAccumulated AmortizationNet Book Value
Developed technology$15,624  $(694) $14,930  $  $  $  
Patents5,727  (1,127) 4,600  6,093  (988) 5,105  
Trade name760  (34) 726        
Total intangible assets, net$22,111  $(1,855) $20,256  $6,093  $(988) $5,105  

Amortization expense expected for the next five years and thereafter is as follows: