csii-20221231

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, 2022

☐ 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 February 7, 2023 was: 41,958,938 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			19
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			29
ITEM 4. Controls and Procedures			30
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings			31
ITEM 1A. Risk Factors			31
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			33
ITEM 3. Defaults Upon Senior Securities			34
ITEM 4. Mine Safety Disclosures			34
ITEM 5. Other Information			34
ITEM 6. Exhibits			34
Signatures			36

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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)


	December 31, 2022		June 30, 2022
ASSETS
Current assets
Cash and cash equivalents	$	59,843	$	66,424
Marketable securities	72,159		93,409
Accounts receivable, net	40,232		39,678
Inventories	41,191		34,567
Prepaid expenses and other current assets	8,535		7,768
Total current assets	221,960		241,846
Property and equipment, net	30,002		29,035
Intangible assets, net	15,043		15,734
Strategic investments	42,034		33,425
Other assets	2,467		2,637
Total assets	$	311,506	$	322,677
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	17,087	$	14,383
Accrued expenses	19,149		23,464
Deferred revenue	525		2,107
Total current liabilities	36,761		39,954
Long-term liabilities
Financing obligation	20,117		20,298
Deferred revenue	3,365		—
Other liabilities	11,874		12,945
Total liabilities	72,117		73,197
Commitments and contingencies (see Note 9)
Common stock, $0.001 par value; authorized 100,000,000 common shares; issued and outstanding 41,965,948 at December 31, 2022 and 40,965,202 at June 30, 2022, respectively	40		40
Additional paid in capital	682,932		673,388
Accumulated other comprehensive income	(170)		(268)
Accumulated deficit	(443,413)		(423,680)
Total stockholders’ equity	239,389		249,480
Total liabilities and stockholders’ equity	$	311,506	$	322,677

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				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
Net revenues	$	61,453	$	59,135	$	121,126	$	117,505
Cost of goods sold	18,461		18,073		35,159		32,381
Gross profit	42,992		41,062		85,967		85,124
Expenses:
Selling, general and administrative	41,642		40,402		86,117		82,253
Research and development	9,533		8,873		18,589		18,895
Amortization of intangible assets	345		346		691		650
Total expenses	51,520		49,621		105,397		101,798
Loss from operations	(8,528)		(8,559)		(19,430)		(16,674)
Other (income) expense, net:
Interest expense	404		409		810		819
Interest income and other, net	(1,093)		(64)		(1,751)		(107)
Total other (income) expense, net	(689)		345		(941)		712
Loss before income taxes	(7,839)		(8,904)		(18,489)		(17,386)
Provision for income taxes	49		63		30		199
Net loss	$	(7,888)	$	(8,967)	$	(18,519)	$	(17,585)

Basic and diluted earnings per share	$	(0.20)	$	(0.23)	$	(0.47)	$	(0.45)


Basic and diluted weighted average shares outstanding	39,663,565		39,199,593		39,635,293		39,143,533

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				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
Net loss	$	(7,888)	$	(8,967)	$	(18,519)	$	(17,585)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale debt securities	103		(52)		106		(69)
Foreign currency translation adjustments	(2)		—		(8)		—


Comprehensive loss	$	(7,787)	$	(9,019)	$	(18,421)	$	(17,654)

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, 2022	$	40	$	673,388	$	(268)	$	(423,680)	$	249,480
Stock-based compensation related to restricted stock awards, net	—		4,324		—		—		4,324
Shares withheld for payroll taxes	—		—		—		(1,191)		(1,191)
Employee stock purchase plan activity	—		174		—		—		174
Unrealized gain on available-for-sale debt securities	—		—		3		—		3
Foreign currency translation adjustments	—		—		(6)		—		(6)

Net loss	—		—		—		(10,631)		(10,631)
Balances at September 30, 2022	$	40	$	677,886	$	(271)	$	(435,502)	$	242,153
Stock-based compensation related to restricted stock awards, net	—		3,547		—		—		3,547
Shares withheld for payroll taxes	—		—		—		(

SEC Form 10-Q filed by Cardiovascular Systems Inc.