csii-20211231

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 December 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 January 31, 2022 was: 40,578,962 shares.

Table of Contents

Cardiovascular Systems, Inc.

Table of Contents


			PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements (unaudited)			3
Consolidated Balance Sheets			3
Consolidated Statements of Operations			4
Consolidated Statements of Comprehensive Income			5
Consolidated Statements of Changes in Stockholders’ Equity			6
Consolidated Statements of Cash Flows			8
Notes to Consolidated Financial Statements			9
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			28
ITEM 1A. Risk Factors			28
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
ITEM 3. Defaults Upon Senior Securities			28
ITEM 4. Mine Safety Disclosures			28
ITEM 5. Other Information			28
ITEM 6. Exhibits			29
Signatures			31

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)


	December 31, 2021		June 30, 2021
ASSETS
Current assets
Cash and cash equivalents	$	65,865	$	71,070
Marketable securities	110,675		135,968
Accounts receivable, net	34,944		40,033
Inventories	31,671		32,313
Prepaid expenses and other current assets	4,842		5,285
Total current assets	247,997		284,669
Property and equipment, net	29,397		28,894
Intangible assets, net	16,426		15,376
Strategic investments	29,666		20,657
Other assets	2,914		2,971
Total assets	$	326,400	$	352,567
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	12,493	$	14,061
Accrued expenses	26,666		38,189
Deferred revenue	2,721		2,400
Total current liabilities	41,880		54,650
Long-term liabilities
Financing obligation	20,456		20,596
Deferred revenue	752		2,194
Other liabilities	3,787		4,169
Total liabilities	66,875		81,609
Commitments and contingencies (see Note 10)
Common stock, $0.001 par value; authorized 100,000,000 common shares; issued and outstanding 40,596,206 at December 31, 2021 and 40,215,554 at June 30, 2021, respectively	39		39
Additional paid in capital	663,660		652,288
Accumulated other comprehensive income	(58)		11
Accumulated deficit	(404,116)		(381,380)
Total stockholders’ equity	259,525		270,958
Total liabilities and stockholders’ equity	$	326,400	$	352,567

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

Table of Contents

Cardiovascular Systems, Inc.

Consolidated Statements of Operations

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

(Unaudited)


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
Net revenues	$	59,135	$	64,169	$	117,505	$	124,713
Cost of goods sold	18,073		13,920		32,381		26,484
Gross profit	41,062		50,249		85,124		98,229
Expenses:
Selling, general and administrative	40,402		40,061		82,253		80,343
Research and development	8,873		9,601		18,895		18,653
Amortization of intangible assets	346		304		650		608
Total expenses	49,621		49,966		101,798		99,604
(Loss) income from operations	(8,559)		283		(16,674)		(1,375)
Other (income) expense, net:
Interest expense	409		412		819		911
Interest income and other, net	(64)		(136)		(107)		(280)
Total other (income) expense, net	345		276		712		631
(Loss) income before income taxes	(8,904)		7		(17,386)		(2,006)
Provision for income taxes	63		63		199		126
Net loss	$	(8,967)	$	(56)	$	(17,585)	$	(2,132)

Basic and diluted earnings per share	$	(0.23)	$	—	$	(0.45)	$	(0.06)


Basic and diluted weighted average shares outstanding	39,199,593		38,808,980		39,143,533		38,746,410

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

Table of Contents

Cardiovascular Systems, Inc.

Consolidated Statements of Comprehensive Income

(Dollars in thousands)

(Unaudited)


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
Net loss	$	(8,967)	$	(56)	$	(17,585)	$	(2,132)
Other comprehensive loss:
Unrealized loss on available-for-sale debt securities	(52)		(85)		(69)		(154)


Comprehensive loss	$	(9,019)	$	(141)	$	(17,654)	$	(2,286)

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

Table of Contents

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, 2021	$	39	$	652,288	$	11	$	(381,380)	$	270,958
Stock-based compensation related to restricted stock awards, net	—		5,523		—		—		5,523
Shares withheld for payroll taxes	—		—		—		(4,990)		(4,990)
Employee stock purchase plan activity	—		324		—		—		324
Unrealized loss on available-for-sale debt securities	—		—		(17)		—		(17)
Exercise of stock options	—		12		—		—		12
Net loss	—		—		—		(8,618)		(8,618)
Balances at September 30, 2021	$	39	$	658,147	$	(6)	$	(394,988)	$	263,192
Stock-based compensation related to restricted stock awards, net	—		3,659		—		—		3,659
Shares withheld for payroll taxes	—		—		—		(161)		(161)
Employee stock purchase plan activity	—		1,854		—		—		1,854
Unrealized loss on available-for-sale debt securities	—		—		(52)		—		(52)
Net loss	—		—		—		(8,967)		(8,967)
Balances at December 31, 2021	39		663,660		(58)		(404,116)		259,525

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

Table of Contents

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	—

SEC Form 10-Q filed by Cardiovascular Systems Inc.