Cardiovascular Systems To Shed 8 Percent Of Staff, Beats Q3 Sales Expectations
Cardiovascular Systems Inc. said Thursday that it would cut its staff by 8 percent as it restructures the company to reduce costs and balance revenue growth.
The New Brighton-based medical device company employs roughly 600 employees, which means it plans to downsize its staff by 45 to 50 positions.
Cardiovascular Systems Inc. (CSI) announced the restructuring measures during its preliminary fiscal third quarter report in which it reported better-than-expected revenue of $43.5 million to $44 million for the three-month period ending March 31. The company beat both its own guidance of $40.5 million to $42 million—a difference of 4 to 5 percent—and Wall Street expectations of $41 million.
“Our immediate focus is to stabilize our sales force and resume sequential quarterly revenue growth,” Scott Ward, interim CEO of CSI, said in a statement. “We also discussed our longer term effort of positioning CSI for profitability and positive cash flow. The restructuring announced today is a significant step in achieving these goals.”
Between staff reductions and the departure of CSI’s CEO David Martin in February due to a cancer diagnosis, the company said it expects to take one-time charges of about $4.5 million. CSI said it would pay another $8 million for a False Claims Act lawsuit that alleged the company ran kickbacks and an off-label marketing scheme in order to augment sales of its products.
CSI said it expects to release its full fiscal third quarter results on May 4.
Following the release of CSI’s quarterly report, company stock shot up more than 30 percent in early morning trading.