csii-20210331

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, 2021

☐ 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: (651) 259-1600

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, One-tenth of One Cent ($0.001) Par Value Per Share	CSII	The 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 filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller 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 April 30, 2021 was: 40,162,040 shares.

Table of Contents

Cardiovascular Systems, Inc.

Table of Contents


			PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements (unaudited)			2
Consolidated Balance Sheets			2
Consolidated Statements of Operations			3
Consolidated Statements of Comprehensive Income			4
Consolidated Statements of Changes in Stockholders’ Equity			5
Consolidated Statements of Cash Flows			7
Notes to Consolidated Financial Statements			8
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			27
ITEM 4. Controls and Procedures			27
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings			29
ITEM 1A. Risk Factors			29
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			29
ITEM 3. Defaults Upon Senior Securities			29
ITEM 4. Mine Safety Disclosures			29
ITEM 5. Other Information			29
ITEM 6. Exhibits			29
Signatures			31

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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, 2021		June 30, 2020
ASSETS
Current assets
Cash and cash equivalents	$	75,333	$	185,463
Marketable securities	135,734		46,691
Accounts receivable, net	38,056		25,212
Inventories	33,367		27,706
Prepaid expenses and other current assets	2,855		2,617
Total current assets	285,345		287,689
Property and equipment, net	28,157		27,810
Intangible assets, net	15,694		16,606
Other assets	17,739		7,414
Total assets	$	346,935	$	339,519
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	12,644	$	11,539
Accrued expenses	35,541		31,100
Deferred revenue	2,262		1,867
Total current liabilities	50,447		44,506
Long-term liabilities
Financing obligation	20,663		20,818
Deferred revenue	2,903		4,707
Other liabilities	2,471		696
Total liabilities	76,484		70,727
Commitments and contingencies (see Note 10)
Common stock, $0.001 par value; authorized 100,000,000 common shares; issued and outstanding 40,161,715 at March 31, 2021 and 39,675,865 at June 30, 2020, respectively	39		39
Additional paid in capital	646,406		631,559
Accumulated other comprehensive income	43		269
Accumulated deficit	(376,037)		(363,075)
Total stockholders’ equity	270,451		268,792
Total liabilities and stockholders’ equity	$	346,935	$	339,519

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

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Cardiovascular Systems, Inc.

Consolidated Statements of Operations

(Dollars in thousands, except per share and share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net revenues	$	63,273	$	61,175	$	187,986	$	193,999
Cost of goods sold	14,013		12,225		40,497		38,615
Gross profit	49,260		48,950		147,489		155,384
Expenses:
Selling, general and administrative	41,442		41,384		121,785		135,003
Research and development	13,163		9,964		31,816		31,515
Amortization of intangible assets	304		337		912		908
Total expenses	54,909		51,685		154,513		167,426
Loss from operations	(5,649)		(2,735)		(7,024)		(12,042)
Other (income) expense, net:
Interest expense	412		501		1,323		1,473
Interest income and other, net	(120)		(394)		(400)		(1,574)
Total other (income) expense, net	292		107		923		(101)
Loss before income taxes	(5,941)		(2,842)		(7,947)		(11,941)
Provision for income taxes	63		47		189		129
Net loss	$	(6,004)	$	(2,889)	$	(8,136)	$	(12,070)

Basic and diluted earnings per share	$	(0.15)	$	(0.08)	$	(0.21)	$	(0.35)


Basic and diluted weighted average shares outstanding	38,911,454		34,149,561		38,800,622		34,029,296

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

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Cardiovascular Systems, Inc.

Consolidated Statements of Comprehensive Income

(Dollars in thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net loss	$	(6,004)	$	(2,889)	$	(8,136)	$	(12,070)
Other comprehensive (loss) income:
Unrealized (loss) gain on available-for-sale debt securities	(72)		(152)		(226)		(137)


Comprehensive loss	$	(6,076)	$	(3,041)	$	(8,362)	$	(12,207)

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 Stock		Additional Paid In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total

Balances at June 30, 2020	39		631,559		269		(363,075)		268,792
Stock-based compensation related to restricted stock awards, net	—		4,836		—		—		4,836
Shares withheld for payroll taxes	—		—		—		(3,410)		(3,410)
Employee stock purchase plan activity	—		332		—		—		332
Unrealized loss on available-for-sale debt securities	—		—		(69)		—		(69)

Net loss	—		—		—		(2,076)		(2,076)
Balances at September 30, 2020	39		636,727		200		(368,561)		268,405
Stock-based compensation related to restricted stock awards, net	—		3,545		—		—		3,545
Shares withheld for payroll taxes	—		—		—		(407)		(407)
Employee stock purchase plan activity	—		2,430		—		—		2,430
Unrealized loss on available-for-sale debt securities	—		—		(85)		—		(85)
Net loss	—		—		—		(56)		(56)
Balances at December 31, 2020	39		642,702		115		(369,024)		273,832
Stock-based compensation related to restricted stock awards, net	—		3,332		—		—		3,332
Shares withheld for payroll taxes	—		—		—		(1,009)		(1,009)
Employee stock purchase plan activity	—		372		—		—		372
Unrealized loss on available-for-sale debt securities	—		—		(72)		—		(72)
Net loss	—		—		—		(6,004)		(6,004)
Balances at March 31, 2021	$	39	$	646,406	$	43	$	(376,037)	$	270,451

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 Stock		Additional Paid In Capital		Accumulated Other Comprehensive Income		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

SEC Form 10-Q filed by Cardiovascular Systems, Inc.