transforming while we grow profitably...possible adverse impacts on our cash flows, and (5) the...

© 2015 SurModics, Inc. 1

Transforming While We Grow Profitably Gary Maharaj President and CEO

Andy LaFrence Vice President of Finance and CFO

June 2015


Safe Harbor Statement Some of the statements made during this presentation may be considered forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations regarding the Company’s capital needs and its performance in the near- and long-term, including our revenue, earnings and cash flow expectations for fiscal 2015, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including (1) our reliance on third parties (including our customers and licensees) and their failure to successfully develop, obtain regulatory approval for, market and sell products incorporating our technologies; (2) the challenges and uncertainties inherent in product development, including the uncertainties of the GLP pre-clinical study and the timeline for receiving regulatory approval that would allow us to initiate a first-in-human trial for SurModics SurVeil™ Drug Coated Balloon; (3) our ability to achieve our corporate goals; (4) possible adverse market conditions and possible adverse impacts on our cash flows, and (5) the factors identified under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2014, and updated in our subsequent reports filed with the SEC. These reports are available in the Investors section of our website at www.surmodics.com.

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Investment Thesis Transforming

– SurModics SurVeil™ Drug Coated Balloon—first-in-human by 9/30/2015 – Whole product solutions provider—develop and monetize proprietary medical devices – Corporate development strategy—enhance relevance

Profitable Growth – Established Provider to Medical Device OEMs

• Strong reputation in coronary and successful diversification into other anatomies

• Sticky business once device has regulatory approval

– IVD Segment • Reduces risk of medical device-only applications

– Highly Profitable Business Model • Operating margins of 31+% over past 3 years

– Strong Balance Sheet and Attractive Cash Flows • $49.1 million of cash/investments at 3/31/2015, no debt • EBITDA margin of 37+% over past three years

Leading provider of innovative surface modification technologies and in vitro diagnostic chemical components

Partner with medical device and diagnostic companies to support their development and commercialization of novel products


Relevance Devices

+

Enabling Technology

+

Differentiated Manufacturing

=

Safe and Better Clinical Outcomes at an Economically Viable Cost


SFA

BTK

AV Fistulas

Coronary

CURRENT FUTURE

DCB Platform Extension Opportunities

Partnership Commitment Through Commercialization

Ability to leverage SurModics DCB experience – Drug processing – Coating formulation – Drug coating application – In-house analytical characterization capabilities

Committed to being a partner through commercialization and beyond – No “brain-drain”; our technology team is intact – We stand-by our products with service and

support


SurModics SurVeil™ Drug Coated Balloon*

*SurModics SurVeil™ Drug Coated Balloon is not commercially available. Preclinical data shown for informational purposes only.


Efficient Coating Maximizes Drug Transfer

Lost During ProcedureRetained on BalloonTransferred to Vessel

Actual DCB Performance (current generation)

Ideal DCB Performance (future generation)

DISPOSITION OF DEVICE DRUG LOAD


SurModics SurVeil™ Delivers More Drug

0

1

10

100

0 day 7 day 14 day 21 day 28 day

Tiss

ue C

once

ntra

tion

(µg/

g)

PK Results -- Group Medians Treatment with 40mm Balloons

SurModics

SurModics SurVeil™ DCB is: 3-5x greater tissue levels than currently available US DCB’s


Superior Drug Transfer and Retention = Uniform & Robust Biological Effect

DCB #1 A 2µg/mm² SurModics 2 µg/mm² DCB #2 3.5µg/mm² Uncoated Tissue stained with Movat Pentachrome, 28-days post-treatment in healthy swine femoral arteries

SurModics SurVeil™ DCB shows greater and more uniform drug effect than first-gen commercial US devices

Blue/Green Color = Proteoglycan = Drug Effect


SurModics SurVeil™ Designed for Manufacturing Efficiency

DCB #1

DCB #2

SurModics DCB


Corporate Development Strategy

Strategy: Technologies and capabilities that enable device performance

Fit: Complementary to existing customer base; sustainable competitive advantage; provides access to growing market segments

Financials: Accretive to sales growth, EPS and ROIC over time

FOCUSED ON M&A OPPORTUNITIES THAT ENHANCE RELEVANCE

Enhance Capabilities Expand Access to New Addressable Markets

Add New Technology Content


Medical Device Hydrophilic Coating Royalty Model

2012 2013 2014

$18.4 $21.2 $22.6

$37.9 $41.1 $43.0

Medical Device (in millions)

Operating Income Revenue

&


Unmatched Commercial Track Record

Applied to more than 150 commercial product families sold worldwide

Oncology Microcatheters

Cardiovascular Coronary stent systems

Specialty guidewires

Chronic total occlusion device

Angioplasty catheters

Percutaneous heart valves

Access systems

Defect repair delivery systems

Neurological Infusion catheters

Hydrocephalic shunts

Stroke treatment

Embolic protection

Ophthalmology Access instruments

Cardiac Rhythm Management CRT leads

Implantable Intravascular defibrillator

Pacemaker leads

Lead delivery catheters & guidewires

Electrophysiology (mapping & ablation) catheters

Urogenital Incontinence devices

Penile implants

Stents / Catheters

Contraceptive systems

Peripheral Vascular Endovascular graft systems

Peripheral stent delivery catheters

Atherectomy / Thrombectomy systems

Intravascular imaging

Vascular closure devices

Surgical Devices Endoscopy accessories

Obesity management

Chest wound drainage

Medical Device


Royalties &

Reagent Sales $

Hydrophilic Partnering Revenue Model

Feasibility Optimization

Medical Device

Licensing Clinical Mfg Services

Regulatory Approval

Tech Transfer Commercialization

3 to 12 months

6 to 48 months

Bridge Coating Services (some customers)

Unparalleled Service Model


Hydrophilic Coatings Markets

Undisputed leader in hydrophilic partnering market Serene™ launch in February 2013 – best in class, high

lubricious and low particulates Significant opportunity – in-house coating Growth markets – neurovascular, peripheral vascular and

structural heart Patent portfolio – multiple generations of coatings

Medical Device


In Vitro Diagnostics

Molecular diagnostics microarray slides Immunoassay chemistries

2012 2013 2014

$4.5 $4.2 $3.5

$14.0 $15.0 $14.4

In Vitro Diagnostics (in millions)

Operating Income Revenue


SurModics IVD Providing critical components for diagnostics tests of today and tomorrow …

TRIDIA surfaces for Molecular Diagnostics …

Protein Stabilizers for Point of Care (POC) devices …

Gold standard detection chemistries for immunoassay diagnostics


Corporate/Financial Perspective

Strong operating margins Strong balance sheet


GAAP Guidance – Continuing Operations Long-term Goal: Double-digit revenue & EPS growth

$0.58

$0.99

$0.88

$0.85 to $0.95

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

FY12 FY13 FY14 FY15Guidance*

$57.4M

$51.9M

$56.1M

$57.0M to $60.0M

$35

$40

$45

$50

$55

$60

$65

FY12 FY13 FY14 FY15Guidance*

FY2015 Revenue Outlook FY2015 EPS Outlook Flat to 4% growth rate Incremental 5 to 7% R&D investment

* refer to non-GAAP pro forma results in the appendix; non-GAAP EPS was $0.66, $0.85 and $0.96 in fiscal 2012, 2013 and 2014, respectively


Investor Relations Contact

For additional inquiries, please contact:

Andy LaFrence 952-500-7062


Use of Non-GAAP Financial Information In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, SurModics is reporting non-GAAP financial results including non-GAAP net income and non-GAAP diluted net income per share. We believe that these non-GAAP measures provide meaningful insight into our operating performance excluding certain event-specific matters, and provide an alternative perspective of our results of operations. We use non-GAAP measures, including those set forth in this presentation, to assess our operating performance and to determine payout under our executive compensation programs. We believe that presentation of certain non-GAAP measures allows investors to review our results of operations from the same perspective as management and our board of directors and facilitates comparisons of our current results of operations. The method we use to produce non-GAAP results is not in accordance with GAAP and may differ from the methods used by other companies. Non-GAAP results should not be regarded as a substitute for corresponding GAAP measures but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures do have limitations in that they do not reflect certain items that may have a material impact on our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with both our financial statements prepared in accordance with GAAP and the reconciliation of the supplemental non-GAAP financial measures to the comparable GAAP results provided for the specific periods presented, which are attached to this presentation.


SurModics, Inc. and Subsidiaries Supplemental Non-GAAP Information

For the Three Months Ended March 31, 2015 (In thousands, except per share data)

(Unaudited)

As Reported

GAAP(1)

Adjustments Adjusted

Non-GAAP(2)

Revenue

Royalties and license fees $ 7,383 $ 7,383

Product sales 5,651 5,651

Research and development 1,381 1,381

Total revenue $ 14,415 $ 14,415

Operating income $ 3,932 $ 3,932

Net income $ 3,051 $ (523) (3) $ 2,528

Diluted net income per share(4) $ 0.23 $ 0.19

(1) Reflects operating results in accordance with U.S. generally accepted accounting principles (GAAP). (2) Adjusted Non-GAAP considers an adjustment to reflect a $523 reduction in net investment income

associated with the sale of Intersect ENT shares. The adjustment to reduce net investment income did not generate a tax benefit as there was an offsetting establishment of a capital loss valuation reserve.

(3) Reflects the impact of the net investment income adjustment noted in (2) above. (4) Diluted net income per share is calculated using the diluted weighted average shares outstanding for the

period presented.


For the Three Months Ended March 31, 2014 (In thousands, except per share data)

(Unaudited)

As Reported

GAAP(1)


Non-GAAP(2)

Revenue




Total revenue $ 13,604 $ 13,604

Operating income $ 3,480 $ 914

(3) $ 4,394

Net income $ 2,459 $ 580 (4) $ 3,039

Diluted net income per share(5) $ 0.18 $ 0.22

(1) Reflects operating results in accordance with U.S. generally accepted accounting principles (GAAP). (2) Adjusted Non-GAAP amounts consider adjustments to reflect a $914 reduction to operating expenses

associated with acceleration of Board of Director stock-based compensation awards and adjustment to the income tax provision utilizing a 36.5% incremental effective tax rate.

(3) Reflects the pre-tax impact of the operating expense adjustment noted in (2) above. (4) Adjusted to reflect the adjustment noted in (2) above. (5) Diluted net income per share is calculated using the diluted weighted average shares outstanding for the

period presented.



For the Year Ended September 30, 2014 (in thousands, except per share data)

(Unaudited)

As Reported

GAAP(1)


Non-GAAP(2)

Revenue




Total revenue $ 57,439 $ 57,439

Operating income $ 18,576 $ 914 (3) $ 19,490

Income from continuing operations $ 12,207 $ 1,055 (4) $ 13,262

Diluted earnings per share from continuing operations(5) $ 0.88

$ 0.96

(1) Reflects operating results in accordance with U.S. generally accepted accounting principles (GAAP). (2) Adjusted Non-GAAP amounts consider adjustments to reduce operating expenses by $914 associated with acceleration of Board

of Director stock-based compensation awards, a $709 reduction in net investment income associated with contingent milestone payments related to the sale of Vessix Vascular shares which were sold in fiscal 2013 and a $1,184 increase in net investment income associated with the impairment loss on our investment in ThermopeutiX. The income tax provision includes an adjustment associated with the stock-based compensation awards utilizing a 36.5% incremental effective tax rate. The adjustments to increase net investment income by $475 did not generate an income tax expense as there was an offsetting release of a capital loss valuation allowance.

(3) Reflects the pre-tax impact of the operating expense adjustment discussed in note (2) above. (4) Adjusted to reflect the adjustments discussed in note in (2) above. (5) Diluted earnings per share from continuing operations is calculated using the diluted weighted average shares outstanding for the

period presented.



For the Year Ended September 30, 2013 (In thousands, except per share data)

(Unaudited)

As Reported

GAAP(1) Adjustments Adjusted

Non-GAAP(2)

Revenue

Royalties and license fees $ 29,774 $ (570) (3) $ 29,204



Total revenue $ 56,132 $ (570) (3) $ 55,562

Operating income from continuing operations $ 18,820 $ (691) (4) $ 18,129

Income from continuing operations $ 14,579 $ (1,987) (5) $ 12,592

Diluted earnings per share from continuing operations(6) $ 0.99

$ 0.85

(1) Reflects operating results from our continuing operations in accordance with U.S. generally accepted accounting principles (“GAAP”). Our Pharmaceuticals segment results are presented as discontinued operations.

(2) Adjusted Non-GAAP amounts consider adjustments to reduce royalty revenue associated with a one-time $570 catch-up payment received in fiscal 2013, a $597 increase to operating expenses as a result of the recovery of legal fees associated with the SRI litigation (this amount represents the recovery of costs incurred in periods prior to fiscal 2013), a $476 decrease to operating expenses associated with a fiscal fourth quarter 2013 restructuring charges, a reduction in net investment income of $1,136 associated with the sale of Vessix Vascular and OctoPlus shares offset by impairment losses on the Company’s investment in ViaCyte and Nexeon, adjustment to the income tax provision for these items, excluding the net investment gains which did not generate a tax benefit, utilizing a 36.5% incremental effective tax rate as well as adjustment to increase the income tax provision for $412 of discrete income tax benefits recognized for the period as noted in detail in (4) below.

(3) Reflects the pre-tax impact of the $570 royalty revenue catch-up payment noted in (2) above. (4) Reflects the $570 royalty revenue catch-up payment, the $597 recovery of legal fees and $476 restructuring

charges noted in (2) above. (5) Adjusted to reflect the items noted in (2) above as well as non-recurring discrete income tax benefits of $261

associated with realization of capital loss carrybacks and $151 from the January 2013 signing of the American Taxpayer Relief Act of 2012 which retroactively reinstated federal R&D tax credits for calendar 2012.

(6) Diluted earnings per share from continuing operations is calculated using the diluted weighted average shares outstanding for the period presented.


For the Year Ended September 30, 2012 (in thousands, except per share data)

(Unaudited)

As Reported

GAAP(1) Adjustments Adjusted

Non-GAAP(2)

Revenue




Total revenue $ 51,928 $ 51,928

Operating income from continuing operations $ 16,342 $ 507 (3) $ 16,849

Income from continuing operations $ 10,129 $ 1,311 (4) $ 11,440

Diluted earnings per share from continuing operations(5) $ 0.58 $ 0.66

(1) Reflects continuing operating results in accordance with U.S. generally accepted accounting principles (“GAAP”). (2) Adjusted Non-GAAP amounts consider adjustments related to Dutch auction tender offer expenses and an

impairment loss on investment recognized in the period in accordance with GAAP. (3) Reflects a $507 adjustment to reduce operating expenses associated with the fiscal fourth quarter 2012 Dutch

auction tender offer. (4) Reflects the after tax impact of the adjustments associated with the $507 Dutch auction tender offer expenses

and the $804 impairment loss on investment. These transactions are non-deductible for tax purposes and did not generate a tax benefit.

(5) Diluted net income per share from continuing operations is calculated using the diluted weighted average shares outstanding for the period presented.


Management Team Growth and Value Creation Track Record

Gary R. Maharaj, President and Chief Executive Officer Joined SurModics in 2010 President & CEO of Arizant Inc. (sold to 3M for $810 million in 2010) 25 years in med-device Served in research for orthopedic implant and rehabilitation divisions

of Smith & Nephew

Timothy J. Arens, Vice President of Corporate Development and Strategy Joined SurModics in 2007 Served as Vice President of Finance & interim CFO and

General Manager of IVD business unit Was Director of Research and Analysis at St. Jude Worked in product development and product management at four

other companies

Andrew D. C. LaFrence, Vice President of Finance and Chief Financial Officer Joined SurModics in 2013 Previously CFO for CNS Therapeutics (sold to Covidien for

$102 million in 2012) CPA with more than 30 years of financial and management

experience including audit partner at KPMG supporting venture-backed, high-growth companies

Charles W. Olson, Senior Vice President and General Manager, Medical Device Joined SurModics in 2001 20-year career also includes General Manager at Minnesota

Extrusion and project management and technical sales at Lake Region

Bryan K. Phillips, Senior Vice President of Legal and Human Resources, General Counsel and Secretary Joined SurModics in 2005 14-year career also includes patent counsel at Guidant’s Cardiac

Rhythm Management Group (now part of Boston Scientific) Practiced law at Merchant & Gould

Joseph J. Stich, Vice President and General Manager, In Vitro Diagnostics Joined SurModics in 2010 25 years of management experience including corporate

development for Abraxis Bioscience; business development and sales at MGI PHARMA

President/COO of Pharmaceutical Corp. of America (subsidiary of Publicis Healthcare Specialty Group)

Sales and marketing at Sanofi-Aventis

transforming while we grow profitably...possible adverse impacts on our cash flows, and (5) the...

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