GlobeNewswire Inc | Nov 9, 2020 04:05PM EST

November 09, 2020

ARDEN HILLS, Minn., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Intricon Corporation (NASDAQ: IIN), an international company engaged in designing, developing, engineering and manufacturing miniature interventional, implantable and body-worn medical devices, today announced financial results for its third quarter ended September 30, 2020.

"Third quarter results included both year-over-year and sequential revenue growth as we see improvement across all our target medical markets. Continued emphasis on expense control while leveraging our core competencies to enter new medical markets for long-term growth remains a priority," said Scott Longval, President and Chief Executive Officer. "Our acquisition of Emerald Medical Services earlier this year is already demonstrating a meaningful contribution, while our directed focus on partnerships with innovators entering the emerging hearing health market is gaining traction."

Third QuarterHighlights:Revenue of $27.4 million compared to $26.9 million in the prior year

-- Diabetes revenue declined 7.7% year-over-year -- Other medical revenue increased 81.6% year-over-year, which included the contribution from recently acquired Emerald Medical Services

Gross margin of 26.3%, compared to 25.2% in the prior year periodNet income per diluted share of $0.07 versus net loss of $0.03 per diluted share in the prior year period

Third Quarter 2020Financial ResultsFor the 2020 third quarter, the company reported net revenue of $27.4 million versus $26.9 million in the comparable prior-year period.

Revenue in Intricons Medical business was $20.6 million, an increase from $19.1 million in the comparable prior-year period. The year-over-year increase was driven primarily by our medical coils business and the impact of Emerald Medical Services which the company acquired in May 2020, partially offset by the reduction in orders due to uncertainty surrounding the COVID-19 pandemic.

Hearing Health revenue was $5.5 million in the third quarter of 2020 compared to $6.4 million in the prior-year third quarter. The revenue decline during the third quarter was largely attributed to the absence of hi Health Innovations revenue and a reduction in advertising as part of the Hearing Help Express restructuring efforts.

Gross margin in the third quarter of 2020 was 26.3%, compared to 25.2% in the prior-year third quarter, primarily due to the cost reduction initiatives and higher volumes.

Operating expenses for the third quarter were $6.7 million, compared to $7.2 million in the comparable prior-year period. The change in operating expenses year over year was due to the cost reduction initiatives.

The company posted a net income of $0.6 million or $0.07 per diluted share in the third quarter of 2020, versus net loss of $0.3 million or $0.03 per diluted share, for the 2019 third quarter.

Conference Call Intricon will hold a conference call today, November 9, 2020, 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: 6348919. A live and archived webcast will be available on the Investors sections of the companys website at: www.Intricon.com.

Forward-Looking StatementsStatements made in this release and in Intricons other public filings and releases that are not historical facts orthat include forward-looking terminology, including estimates of future results, the impact of the Emeraldacquisition, statements regarding the estimated costs and expenses of the restructuring and estimated annualexpense savings, are forward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995. These forward-looking statements may be affected by known and unknown risks, uncertainties and other factors that are beyond Intricons control, including without limitation, the impacts of the COVID-19 pandemic and measures taken in response, the risks associated with the Emerald acquisition, , and may cause Intricons 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 companys filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2019 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 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.

AboutIntricon CorporationHeadquartered inArden Hills, Minn.,Intricon Corporationdesigns, develops and manufactures miniature interventional, implantable and body-worn devices. These advanced products help medical, healthcare and professional communications companies meet the rising demand for smaller, more intelligent and better-connected devices.Intriconhas facilities inthe United States,Asia, andEurope. The companys common stock trades under the symbol IIN on theNASDAQ Global Market. For more information aboutIntricon, visitwww.intricon.com.

Investor ContactLeigh Salvo(415) 937-5404investorrelations@intricon.com

INTRICON CORPORATIONMARKET REVENUE(Unaudited)

THIRD QUARTER YEAR TO DATE($ in 000's) 2020 2019 Change 2020 2019 Change Medical $ 20,649 $ 19,099 8.1 % $ 55,125 $ 60,784 -9.3 %Diabetes 14,518 15,723 -7.7 % 41,569 50,837 -18.2 %Other Medical 6,131 3,376 81.6 % 13,556 9,947 36.3 % Hearing Health 5,491 6,358 -13.6 % 13,845 20,044 -30.9 %Value Based 953 1,510 -36.9 % 3,513 4,876 -28.0 %Direct-to-End-ConsumerValue Based 1,779 2,443 -27.2 % 3,888 7,419 -47.6 %Indirect-to-End-ConsumerLegacy OEM 2,759 2,405 14.7 % 6,444 7,749 -16.8 % Professional Audio 1,227 1,436 -14.6 % 3,502 4,972 -29.6 %Communications Total $ 27,367 $ 26,893 1.8 % $ 72,472 $ 85,800 -15.5 %

INTRICON CORPORATIONCONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS(In Thousands, Except Per Share Amounts)

Three Months Ended Nine Months Ended(unaudited) September September September September 30, 30, 30, 30, 2020 2019 2020 2019 Revenue, net $ 27,367 $ 26,893 $ 72,472 $ 85,800 Cost of goods sold 20,169 20,120 54,096 62,253 Gross profit 7,198 6,773 18,376 23,547 Operating expenses:Sales and 1,365 2,609 5,038 9,071 marketingGeneral and 3,654 3,715 11,673 10,551 administrativeResearch and 1,458 840 3,868 2,902 developmentRestructuring - - 1,171 - chargesImpairment loss - - - 3,765 Other operating 253 - 746 - expensesTotal operating 6,730 7,164 22,496 26,289 expensesOperating income 468 (391 ) (4,120 ) (2,742 )(loss) Interest income, 41 240 322 703 netOther income 192 (52 ) 293 (458 )(expense), netIncome (loss) fromcontinuingoperations before 701 (203 ) (3,505 ) (2,497 )income taxes anddiscontinuedoperationsIncome tax expense 47 87 94 334 Income (loss) fromcontinuingoperations before 654 (290 ) (3,599 ) (2,831 )discontinuedoperationsLoss on disposalof discontinued - - - (1,116 )operationsLoss fromdiscontinued - - - (597 )operationsNet income (loss) 654 (290 ) (3,599 ) (4,544 )Less: Incomeallocated to 10 - 17 - non-controllinginterestNet income (loss)attributable to $ 644 $ (290 ) $ (3,616 ) $ (4,544 )IntriConshareholders Basic income(loss) per shareattributable to IntriConshareholders:Continuing $ 0.07 $ (0.03 ) $ (0.41 ) $ (0.32 )operationsDiscontinued - - - (0.20 )operationsNet income (loss) $ 0.07 $ (0.03 ) $ (0.41 ) $ (0.52 )per share: Diluted income(loss) per shareattributable to IntriConshareholders:Continuing $ 0.07 $ (0.03 ) $ (0.41 ) $ (0.32 )operationsDiscontinued - - - (0.20 )operationsNet income (loss) $ 0.07 $ (0.03 ) $ (0.41 ) $ (0.52 )per share: Average shares outstanding:Basic 8,936 8,764 8,877 8,738 Diluted 9,272 8,764 8,877 8,738

INTRICON CORPORATIONCONSOLIDATED CONDENSED BALANCE SHEET(In Thousands, Except Share Amounts)

(unaudited) September December 30, 31, 2020 2019Current assets: Cash and cash equivalents $ 16,081 $ 8,523 Restricted cash 647 639 Short-term investment securities 14,176 23,451 Accounts receivable, less provision for doubtfulaccounts of $365 at September 30, 2020 and $325 at 9,192 8,993 December 31, 2019Inventories 20,463 16,377 Contract assets 10,592 10,237 Other current assets 1,426 1,975 Current assets of discontinued operations - 80 Total current assets 72,577 70,275 Machinery and equipment 45,083 41,073 Less: Accumulated depreciation 30,915 27,522 Net machinery and equipment 14,168 13,551 Goodwill 13,714 9,551 Intangible assets 11,282 5,545 Operating lease right-of-use assets, net 3,812 4,372 Investment in partnerships 623 1,160 Long-term investment securities - 8,629 Other assets, net 289 510 Total assets $ 116,465 $ 113,593 Current liabilities: Current financing leases $ 34 $ 101 Current operating leases 1,512 1,729 Accounts payable 8,340 9,876 Accrued salaries, wages and commissions 4,271 2,274 Other accrued liabilities 4,429 2,869 Liabilities of discontinued operations - 77 Total current liabilities 18,586 16,926 Noncurrent financing leases 2 30 Noncurrent operating leases 2,475 2,937 Other postretirement benefit obligations 349 382 Accrued pension liabilities 667 655 Deferred tax liabilities, net 1,104 - Other long-term liabilities 3,790 2,171 Total liabilities 26,973 23,101 Commitments and contingencies Shareholders? equity: Common stock, $1.00 par value per share; 20,000shares authorized; 8,943 and 8,781 shares issued and 8,943 8,781 outstanding at September 30, 2020 and December 31,2019, respectivelyAdditional paid-in capital 88,908 86,770 Accumulated deficit (7,902 ) (4,286 )Accumulated other comprehensive loss (474 ) (520 )Total shareholders' equity 89,475 90,745 Non-controlling interest 17 (253 )Total equity 89,492 90,492 Total liabilities and equity $ 116,465 $ 113,593