Theragenics ($TGX) blames the "headwinds" of healthcare reform fallout, the looming medical device tax and economic uncertainty for a disappointing 2012 third quarter. The maker of surgical products and brachytherapy seeds for prostate cancer treatments said revenue and net income both declined.
Consolidated revenue reached $19.9 million during the quarter, a 5% drop from the $21 million in revenue booked during the same period last year. Net income dropped to just $690,000, down from more than $1.1 million over the company's 2011 third quarter. Earnings per share also dipped a penny year-over-year, down to just 2 cents.
The Georgia company has done a number of things to try to boost stockholder value, including a $10 million share repurchasing program in July. But with Theragenics, executives in yet another medical device company are pointing to healthcare reform and the device tax as creating a much tougher environment in which to do business. Critics of the device tax in particular have said it will hamper innovation and lead to job cuts, but larger device companies arguably can more easily absorb the extra costs. Smaller device operations: Not so much.
"Headwinds continue in all four of our business units," Theragenics chairman and CEO M. Christine Jacobs said in a statement. "The medical device sector in which we reside is facing a triple threat of healthcare reform fallout, an impending medical device tax and macroeconomic uncertainty."
Jacobs said the company is responding to the challenges by focusing on organic growth, but is also cutting costs to boost profit margins and closely managing spending.
- read the earnings release