ARDEN HILLS, MINNESOTA — IntriCon Corporation, a leading designer, manufacturer and distributor of miniaturized body-worn devices, including hearing aids, announced financial results for 2017. The suburban Minneapolis company, which provides hearing aids and other components for many distributors, announced record full-year revenue of $88.3 million for 2017, an increase of 30% over 2016.
The company also announced that for the fourth quarter of 2017, net sales rose to $22.2 million, up over 25% from $17.7 million in the prior-year period. The increase was primarily due to year-over-year revenue gains from IntriCon’s largest medical customer and continued traction in value hearing health.
Hearing Help Express (HHE) hearing aid orders, a company IntriCon recently acquired, increased their revenue 173% in the quarter over prior-year fourth quarter, an increased largely due to investments in marketing and sales assets.
According to Business Wire, IntriCon’s overall medical business demand also continues to strengthen. Over the last six months, key medical customers have invested, or made commitments to invest, in over $3 million in capital equipment. In response to these commitments, IntriCon is expanding its manufacturing footprint. First, the company is phasing out select legacy hearing health product lines in its existing Minnesota facility to free up manufacturing floor space. Second, in the current quarter, IntriCon intends to secure additional manufacturing floor space near its existing locations in Minnesota, to accommodate robotic assembly of medical components and systems. In conjunction with the added space, IntriCon is also increasing its molding capacity. During the 2017 fourth quarter, the company added six presses and has another five presses on order for delivery in the first half of 2018.
IntriCon Sees Continued Growth in Hearing Healthcare
On the hearing health front, total sales increased 31.5% from the prior-year fourth quarter, primarily stemming from growing traction with the company’s value hearing health initiatives, including 28.0 percent growth in direct-to-insurance sales, the addition of new private label direct-to-consumer hearing device partners and a $1.9 million contribution from HHE, partially offset by declining conventional channel sales.
During the fourth quarter, IntriCon completed its acquisition of HHE, acquiring the remaining 80% stake of the DeKalb, Ill.-based, direct-to-consumer mail order hearing aid provider. Terms of the transaction included $650,000 in cash and repayment of approximately $1.8 million in debt to HHE’s 80% holder.
It was also announced that during the fourth quarter, IntriCon made payments to secure its 49% equity interest in Frankfurt, Germany-based, Soundperience.
Soundperience has designed the first psycho-acoustic method of analyzing peripheral hearing and central hearing processing, branded as the Sentibo Smart Brain System. The software is a sophisticated, self-fitting hearing aid and brain training software technology that is being used in the German market today, most notably through IntriCon’s Signison joint venture with Soundperience.
According to CEO Mark Gorder,
“During the fourth quarter, we further advanced our new direct-to-consumer channel to deliver superior, outcomes-based, affordable hearing healthcare. In addition to completing our acquisition of HHE and continuing to deliver quarter-over-quarter progress, we also made further investments in Soundperience—a German-based provider of key self-fitting technology. 2017 was transformational year for IntriCon. We posted record top-line growth in our key medical and value hearing health businesses. Importantly, we began to strip away the significant barriers that prevent innovative hearing health solutions, and through HHE, we’re now providing affordable and accessible solutions to millions of unserved or underserved Americans. Additionally, we were able to strengthen key medical relationships, enabling meaningful growth opportunities. We enter 2018 with the assets in place to deliver superior outcomes-based affordable hearing healthcare, drive continued growth in our medical business and reward our shareholders with value.”