Medical device maker Synovis Life Technologies (NASDAQ:SYNO) said fiscal third-quarter revenue spiked 19%, while profits rose 33%, beating analyst estimates.
The company, which makes products to repair and reconstruct skin tissue, managed to grow revenue in the double digits for the 17th consecutive quarter, amid a challenging economic climate for the healthcare industry.
Net sales grew to a record $21 million for the three months ending July 31. That compares with $17.6 million, a year ago.
"Our strong portfolio of soft tissue repair products has proven again that it is a powerful generator of revenue growth and profitability," said president and CEO, Richard Kramp.
The company reported profits of $2 million, or 17 cents per fully diluted share, compared to $1.5 million, or 13 cents per fully diluted share, a year earlier.
Analysts expected earnings of around 15 cents a share, on revenue of $20.5 million.
Operating income for the third quarter grew 32% to $3.0 million, while gross margin came in flat at 72.4%.
For the quarter, revenue for Peri-StripsDry, which is a biomaterial used to reduce fatal leaks in gastric bypass surgery, rose 20% to $6 million.
"The number of gastric sleeve procedures performed is on the rise as private insurance companies increasingly reimburse for this cost-effective surgery,” said Synovis in a statement.
Revenue from Veritas, a collagen-based material sold for ventral hernia and breast reconstruction, jumped 7%, while sales from tissue guard products grew 12% as the company sold more units at higher prices.
Sales from Synovis’ microsurgical product business shot up 45% year-over-year, driven by strong demand for Deep Inferior Epigastric Perforator Flap Procedure (DIEP) breast reduction procedures.
The company's orthopaedic and wound product division saw revenue climb 36%, with collagen-based Unite Biomatrix – which is used to treat chronic wounds – fueling the growth.
On the cost side, selling, general and administrative expenses grew 16% to $11 million, stemming from investments in sales and marketing, personnel expenses, as well as initiatives to grow revenue.
The St. Paul, Minnesota-based company’s shares climbed 18 cents, or 1.14%, to $15.93 Wednesday on the Nasdaq.