Andy LaFrence - VP of Finance and CFO Gary Maharaj - President and CEO.

Jan Wald - Benchmark. Jim Sidoti - Sidoti & Company Ben Haynor - Feltl & Company Michael Petusky - Barrington Research Associates.

Good day, and welcome to the SurModics’ Third Quarter 2015 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Andy LaFrence, Vice President of Finance and Chief Financial Officer. Please go ahead, sir..

Thank you, Christie. Good morning and welcome to SurModics’ 2015 third quarter earnings call. Before we begin, I would like to remind you that during the course of this call we will make forward-looking statements.

These forward-looking statements are covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding SurModics’ future financial and operating results or other statements that are not historical facts.

Please be advised that actual results could differ materially from those stated or implied by our forward-looking comments resulting from certain risks and uncertainties including those described in our SEC filings.

SurModics disclaims any duty to update or revise our forward-looking statements as well as a result of new information, future events, and developments or otherwise. We also refer to non-GAAP measures because we believe they provide useful information to our investors. Today’s news release contains a reconciliation table to GAAP results.

Finally, this conference call is being webcast and is accessible through the Investor Relations section of the SurModics website where the audio recording webcast will also be archived for future reference. A press release disclosing our quarterly results was issued earlier this morning and is available on our website at www.surmodics.com.

On today’s call I’ll provide an overview of our third quarter results. I will not go through the results for the first nine months of fiscal 2015 as they will be included in the table with the press release. Gary, will then cover our key achievements and discuss our growth drivers and strategies.

Finally, we will open the call to take questions including questions on the first nine months results. I’ll start with the financials. Revenue for the third quarter of fiscal 2015 rose 9% to $15.9 million compared with $14.6 million in the third quarter of last year.

Third quarter revenue include $0.7 million one time catch up royalty payment related to period prior to fiscal 2015 third quarter. On a GAAP basis our diluted earnings from operations totaled $0.30 per share as compared to $0.26 per share in the prior year period.

The current year quarter include $0.04 per share benefit associated with the one time royalty catch up payment. Excluding this payment, non-GAAP earnings per share from operations were $0.26 in the current year quarter. We delivered operating income of $5.9 million in the third quarter of fiscal 2015, up from $5.3 million in the prior-year period.

Operating margin increased from 36% to 37% in the current year quarter. Operating margin benefited from increased revenue including the one time royalty catch up payment offset by higher planned expenditures associated with our SurVeil Drug Coated Balloon program as well as professional service related cost. Turning now to our two business units.

Medical Device is the larger business unit; it contributes approximately three-quarters of our total revenue. Revenue is derived from both our hydrophilic coatings and device drug delivery coatings. Revenue rose to $11.6 million, increasing 7% from the year-ago period.

Third quarter hydrophilic coating royalty revenue totaled $7.7 million, up 6% from last year, excluding the one time royalty payment noted previously, hydrophilic coating royalty revenue decreased 4% due to the expiration of our first generation patents in the prior year period.

For the third consecutive quarter peripheral applications were the leading royalty segment reflecting diversification of our hydrophilic coating revenue portfolio. Reagent product sales return to growth during the third quarter compared with the same prior year quarter.

The Medical Device business customer research and development revenue increased $22 million for the quarter, but higher demand for contract coating services to support customer clinical trials in select product launches. This unit generated $6.3 million of operating income in the third quarter, up 8% from a year ago.

The one time royalty catch up payment offset by planned increase drug coated balloon R&D investment accounted for this segment’s change in operating income. For In Vitro Diagnostics unit, third quarter fiscal 2015 revenue totaled $4.3 million, an increase of 13% from a year ago.

This year the IVD business unit realized exceptional revenue growth from sales of our immunoassay reagents as well as molecular diagnostics product line. Product gross margin for IVD was 65% in the third quarter compared with 62% in the prior-year quarter.

This increase mainly related to improved manufacturing leverage resulting from stronger volumes and product mix. IVD operating income was $1.2 million compared with $1 million in the second quarter of fiscal 2014.

Operating margin increased to 28% versus 26% in the prior-year quarter, due to stronger operating leverage from higher sales, partially offset by higher legal cost associated with a lawsuit we filed against our competitor.

This lawsuit had been pending since the third quarter of fiscal 2014 and was favorably resolved in July 2015 for a nominal amount. Now, I’d like to discuss our third quarter 2015 revenue summary by category. First, a royalty and license fees, which are generated primarily in our Medical Device business unit.

This revenue category was $7.9 million, an increase of 7% from last year, stemming from the one time hydrophilic coating royalty catch up payment. Second, product sales in the third quarter of fiscal 2015 totaled $6.6 million, up 8% from the year-ago period. This reflects higher product shipments in our In Vitro Diagnostics business unit.

And third quarter R&D revenue was $1.4 million, up from $1.2 million a year ago. SG&A expenses in the third quarter of fiscal 2015 were 25% of revenue similar to the prior year period. On a dollar basis, SG&A in the third quarter of 2015 totaled $4 million compared with $3.6 million a year ago.

The increase reflects higher compensation as well as legal and professional services expense. As a percentage of revenue, third quarter R&D expenses were 24% versus 25% in the year-ago period. R&D expense of $3.9 million for the quarter increased 6% from last year, resulting from planned higher drug coated balloon development cost.

As we have discussed, we are experiencing higher research and development investment for remainder of fiscal 2015, this is consistent with our previously provided financial guidance. Income tax expense was 33% of pretax income in the third quarter, up from 32% in the prior-year period. Looking at our balance sheet, it continues to be strong.

Our cash and investments totaled $54.1 million and we had no debt outstanding at June 30, 2015. We continue to generate solid operating cash flow. Cash flow from operations was $12.1 million for first nine months of fiscal 2015.

We invested $0.4 million in property, plant and equipment and returned $20 million to our shareholders through the accelerated share repurchase program announced in November 2014. The accelerated share repurchase program was finalized in July of 2015 was an incremental of 90,000 shares delivered to SurModics.

Our current cash and investment balances, and operating cash flows, combined with SurModics’ $20 million line of credit and $175 million shelf registration, provide adequate capacity to support our corporate strategic initiatives.

We are updating our previously stated revenue and earnings per share, operating cash and capital expense flow guidance for fiscal 2015. We now estimate revenue for fiscal 2015 to be in the range of $58 million to $60 million, an increase from our previous guide of $57 million to $60 million.

We are raising our GAAP diluted earnings per share guidance to be in the range of $0.95 to $1.00 per share, up from $0.85 to $0.95 per share. Cash flow from operating activities is expected to be in the range $17 million and $18 million and we project capital expenditures for fiscal 2015 to range between $1.7 million and $2 million.

We preferred well finance in the third quarter as result of the hard work, focus and dedication of the SurModics' team. Thank you to the entire SurModics' team. And now I ask Gary to share his perspective.

Gary?.

Thank you, Andy. First I am so proud of our performance this quarter and I want to echo Andy's sentiments of gratitude to our team members. Consistently strong operating performance. We continue to perform according to our strategy intend of transformation even while delivering profitable growth.

Our strategic tri-factor continues to be; first to generate maximum revenue growth in our core hydrophilic coatings and In Vitro Diagnostics businesses.

And second to transform SurModics into a whole product solution provider of medical devices via organic R&D and corporate development initiatives, and finally to strive to accomplish these while continuously optimizing our operating margins. Let me start with operating margin optimization.

Our operating margin in the third quarter increased as you heard from Andy to 37% from 36% in the prior year quarter, and up sequentially for 27% in the second quarter of fiscal 2015. On a non-GAAP basis adjusting for one time royalty catch up payment, operating margin was 32% in the current year quarter.

Concurrently we increased R&D spending by adding an additional $200,000 over the prior year quarter as we intentionally ramped up R&D most notable in our SurModics SurVeil Drug Coated Balloon program. We also continue to invest in our corporate development initiatives as we proactively seek M&A opportunities that support our transformative goals.

Turning to our core business revenue. I am pleased with the continued gains in our In Vitro Diagnostic or IVD business unit. As Andy mentioned, we achieved 13% higher revenues over a year ago.

We expect to seek continue positive revenue growth trend in In Vitro Diagnostic in the mid single digit range given that we have a large quarterly comparables during the next five quarters. Our Medical Device business also continues to deliver positive profitable growth. Reagent sales return to growth this quarter.

Last quarter we discussed some customers having proactively reduced inventory as part of working capital management. We are encouraged by return to more normal buying patterns and we will continue to closely monitor this in the next two quarters. We remain busy with evaluations feasibilities on new customer products that our Advanced Serene Coatings.

In fact, we signed eight licenses that use serene during the third quarter. This new licensees cover various device applications within the coronary neurovascular and structural heart market segment, and we are excited for when these devices eventually receive regulatory approval. Now let's turn to our transformative activities.

Our corporate development initiatives remain in high gear. We continue to screen many opportunities.

We are being proactive in scanning full and approaching attractive companies with talented people, best in class engineering, manufacturing, design and technology, the right geographic and customer footprint and a complimentary business model that allows us to pursue our goal of developing whole product solutions.

Turning to our SurModics SurVeil Drug Coated Balloon, our enthusiasm for Paclitaxel Drug Coated Balloon is as high as ever and continuously increasing. And we are focused and moving now in the first in human pathway as quickly as possible.

We continue to preclinical GLP evaluation and submitted our data and actually started the required regulatory filing process to initiate the first in human clinical study. We are currently engaged in discussion with the respective regulatory body and we have begun answering the questions regarding our filing.

Now that we are in the process, we have greater clarity on the regulatory timelines and believe that this process will take perhaps 60 to 90 days to complete. As a result, our initial very aggressive target to enroll patients by September 30th has been revised to the first quarter of fiscal 2016.

In the interim however we are continuing our investment in parallel activities such as preparing and qualifying the clinical sites for when we obtain a regulatory approval to proceed with the study. The DCB market continues to be large and we believe we have a differentiated technology in this space.

In summary, we continue to make steady progress towards our goals. These are to build our core business revenue, to optimize the operating income and earnings for long term value creation, to proactively seek the right transformative corporate development opportunities.

And to initiate early clinical assessment of the SurModics SurVeil Drug Coated Balloon. I would be remiss if I did not comment on our increasing revenue and earnings per share guidance for fiscal 2015. We were successful and profitably growing the business through the first nine months of fiscal 2015 while making significant investments in our future.

As a result, we are increasing our revenue guidance to $58 million to $60 million as well as earnings per share guidance from $0.95 to $1.0 per share. We look forward to an exciting finish to fiscal 2015 and we will share with you during our next quarterly call in November. Operator, this concludes our prepared remarks.

We'd now like to open the call for questions. Thank you..

[Operator Instructions] And we will take our first question Jan Wald with Benchmark..

Hi, good morning, everyone. Congratulation on the quarter. I guess one question I have and you may not be willing to answer is, you now are working with the regulatory body.

Do you care to say which regulatory body you are work with on a DCB?.

Jan, I would prefer to leave that until we actually obtain the approval. We haven't declared that yet but it is certainly very strategic and I would be happy to say that we would -- and I will ask Andy that we would more on likely to file a press release when we have received the approval..

That's correct, Gary..

So then you will hear. .

Oh yes I guess. I guess the next question is on the medical devices. You have eight new contracts I guess that you are negotiating. Any other color on where you are in the pipeline with other with other contracts that you already have had and --.

We've already -- we actually have signed those license agreements. So we no longer negotiating them but the pipeline and feasibility as you know our process as customers come to us achieve a certain specification for a device.

And then we would can anywhere from three months to a year depending on the complexity of the device, to meet the specification before signing that. So we have a rich and deep pipeline of all of those opportunities that our commercial development team continuous to work on. Now they -- I don't think we have given a color on how many they are.

But they are certainly in the dozens. And so they each have a specific cadence again becoming -- depended on the complexity and so as they achieve those targets we signed these contracts and then we wait along with our customers for the regulatory approvals to come through.

What I would say is that I wouldn't get too attached to the number eight in any given quarter. I don't want to set that as a new benchmark but as you can see we've been steadily signing these each quarter. .

Well, that's good to know.

And I guess in terms of pacing, how would in terms of our model going into next year and even into 2017, how do we -- how would you like us to pace that these new contracts or the contracts you have?.

Yes, Jan, think about in this way as Gary stated today and I think we've been insisting is that IVD business we look at been a mid single digit growth business. And as we said in our last call is that combinations of core growth as well as transformative revenues are needed to overcome the deficits that we have from next year's patent expiration.

So I think what you are without providing guidance for 2016 at this point which we will provide in November, where you -- where most of the folks who kind of landed is kind of where our thoughts are for next year in terms of revenue excluding a transformative or acquisition strategy. .

And Jan as far as the pacing for licenses what I would say is that the currency you should be thinking is not necessarily number, it is both we know and we certainly can't share on behalf of our customers, even if it is one license, one license of a major device can be more than 10 of a smaller devices in a given market.

So the real currency as we look at when we forecast is the market potential for revenue of those devices. So we will continue to sign contracts each quarter. We skip a quarter; it is just a matter of the cadence of what was available at that time.

But three contracts in the quarter of high quality revenue devices would always be preferable on a dozen signings that the devices in a tough crowded market with a lot of ASP decline..

And I guess I would remiss if I didn't ask about the patent cliff if you allow me that term that you are facing.

How do you feel about that cliff right now in terms of having signed these new contracts and other things that is going on into the company? Are you going to be able to avoid it? Are you going to be able to at this point minimize it? How do you feel about it?.

Jan, if you think about the funnel, the development funnel and then the regulatory process. It typically takes 6 to 48 months after the sign of licenses for these customers to actually get the products into the market and to a point where we are realizing some royalties.

So we think about that pipeline, these are going to be stacked up over many years in terms of how they actually execute into significant cash flows to the company. So our thoughts in terms of our exposure for the patent expiration have not changed from our filings we had in the last Q or the last K. So we are still on line with that.

We continue to work very hard to convert and we'll provide more guidance around that in November..

Any -- are you willing to say how much is going to go away in your fiscal 2016?.

I refer back to our disclosure we had in our last Q as well as in the K, is that 19% of our 2014 revenues are subject to the patent expiration, of which our best assessment is that 5% of those revenues will go away over a couple year period, again reminding you that the US patent expire in the first quarter of fiscal 2016 we feel that impact in the second quarter.

And the o-US patents will expire a year later. So that 5% will be spread over a couple of years and then the remaining 14% of our 2014 revenue will be subject to a step down royalty rate which will start in the second quarter. Again the US will start in the second quarter of 2016 and the o-US in the second quarter of 2017.

So that -- there has been no change in terms of our guidance around the impact of the third generation patent expiration. .

And clearly we intend to mitigate and minimize the impact with all the management actions. So we continue to work diligently to do that. .

And our next question comes from Jim Sidoti with Sidoti & Company..

Good morning. Can you hear me? Hi, it is nice to hear you guys in the morning instead of the afternoon for a change.

Can you tell us have you got a hospital picked out where you are starting the first trial?.

Okay.

So now I know that's a cheeky way of telling which your regulatory body you are dealing with but we have several of them picked out and the ones we picked out whatever the regulatory geography, we pick them as a very high use well known clinicians who use DCBs and in fact I would say that these sites amongst the highest enrollers in prior DCBs studies.

For both the products that they are on the market. And that doesn't -- lot of these studies both done in Europe and some of them were done in United States. But nonetheless they were very competent sites that we qualified. And clinicians and principal in that theatre as well..

Right. And then can we talk about the balance sheet? $4 a share in cash, it sounds like you exhausted the weighted stock buyback program. And you also talked about working an acquisition.

So I guess two questions are, will you open a new stock buy program in fiscal 2016 and have you turned down any opportunities in the past three months as far as the acquisitions?.

I'll take this question, Jim. In terms of our balance sheet right now, we have $54.1 million in cash and cash equivalent. And as stated in the last quarterly Q, we did go through a process this quarter to liquidate our investments so that we are highly liquid so that if there is an opportunity we can deploy that capital as quickly as possible.

And also avoid any risk associated with future interest rates hikes that would impact our credit value of our debt instruments. So right now as we look at our cash and capital allocation thought process is still primarily related to corporate development initiatives. We do still have a $10 million authorization out there by the Board.

My thoughts right now around that are that we would focus on corporate development and we don't comment in lot of detail in terms of our cadence of corporate development. I can just tell you it is very robust at this point.

We will continue to look at things and we will execute on that strategy and continue to work on it in the next year so I won't give any details but we did comment in I think the first quarter as well as in the first quarter of last year that we have had opportunities to get in due diligence with a number of companies.

And we will continue mature that cadence of the company's in the pipeline and pursue opportunities share in the next several quarters. .

Yes. Allow little color to what Andy said. We have screened over 40 companies in the last three months alone. I mean this is not steady as you goes rate, this is pretty intense process for us. And as far as tuning down it, it is less about tuning down and really, really being disciplined and whether these companies have a strategic fit for us.

Many of these companies have lot respect for them but we really have then to decide where they going which is way SurModics wants to go. If it is not strategic fit then it doesn't make sense in that regard. So really very, very active in doing that. And last thing I will add is just philosophically we like our stock and we have that $10 million.

Andy is bias and I agree with is to keep that money for corporate development initiatives but we value our stock and generally like it so there is always room for opportunism if that occurs on our part for our stock..

[Operator Instructions] And our next question comes from Ben Haynor wit Feltl & Company. .

Good morning, gentlemen. On the delay from calendar Q3 to calendar Q4 to start the SurVeil trial. Is that -- I know it was -- is always going too targeted towards the end of calendar Q3.

Should we look at that as a slippage of called a few weeks or is a closer to few months?.

We clearly signal our intend towards -- when I call it we call the green light strategy for aggressively going to see if we can get the first patient enrolled by September 30.

We as -- that the regulatory pathway we have chosen has some significant advantages and as we've got into and started the dialogue with the regulatory agency, with the questions and the filing, now we have much clear sites on it.

So I think net-net it is a delay but in actuality it is because we have more clarity being on the inside of that process now. And we -- given the green light goals we want I would say a couple month is not a meaningful impact. We don't believe the dialogue is out of bound in terms of the questions.

We have a very advanced generation of drug coated balloon so some of these agencies haven't seen any device deliver this much drug. We are using a proprietary excipient so that the types of back and forth not unexpected. I believe my target is by the end of the calendar year and we continue to do everything we can to control what we can.

But it depends if how long the rounds of questions continue. If you can get through the questions in couple iteration in that dialogue, clearly we can target at end of calendar year. If it takes one or two more iteration each of those add about six weeks for the process. So I feel confident that we can get this done by the end of the calendar year.

But recognizing that the timeline is not ours to control at this point. .

That's helpful.

And then on the -- do you think that you theoretically we could perhaps see some data in next summer or given the high enrolling site that you talked about for your clinical sites or expected clinical sites or might that also slip month or two?.

We continue to invest in parallel and we wouldn't continue to development of these sites if we didn't feel some sense of confidence and eventually we will have this approval. We are looking for very high enrolling sites who skilled with the prior generation of DCBs that are currently on the market.

And so that we -- I would say we hope to make up time. We haven't discussed our clinical trial strategy and we will give more color on that when we get an approval in terms of what the actual clinical trial. And what I can say is our clinical trial strategy is in intended to accelerate a US IDE filing for the pivotal by a strategic customer.

And typically the strategies have been followed; we are not necessarily following that with an advantage of speed. So we will see patient data. I mean we expect to see patient data during the next summer.

The real data timing you have to think of, from the time the first patient is implanted it is a six month follow up either angiographic or duplex ultrasound. So you can count the timing from the time we are successful to start the study and enroll the first patient and then add six months to that for the initial data.

The initial safety data would be within 30 days. And as any first in human is a big safety end point that's really relevant. So that data will be available really --.

Okay, great. And then I don't know if you can give this but with the nice quarter you had in new serene licenses, could you kind of provide up down between kind of the number of serene licenses you have out there versus previous generation coating license..

Well, the majority of licensees now that during the half -- clearly serene and the people are optimizing towards that. As far as the ratio, I think we have disclosure --.

We have provided that disclosure in the past. .

And, Ben, I would say just what I told Jan, the real currency in which unfortunately you can't model is not number; it is actually the revenue contribution from those. So one very big stent delivery system of valve overpowers many small PTCa balloon catheters as an example. .

That makes sense. Just trying to see if I can drag a little more. I think yes.

And then lastly for me anything more you can share on your experiments going on whether in coatings drug delivery or IVD?.

Yes. We continue to build the pipeline. The olimus program that we have, we have a major semi-animal study coming up here where we are doing dose assessments in terms of what are the best doses. As you know, the olimus need to get a fair amount more drugs into the tissue for that drug. And really looking to what vascular anatomy to target that.

So we feel pretty good that we can get enough olimus into the tissue. And depends on what balloon is it, is it an O14 below- the- knee balloon, is it an O18 balloon or is it AV fistula balloon.

Those are the market choices that we have to decide in addition to that angle, so still very good the way that program is and in fact with our first generation of Paclitaxel have some choices where we have a whole family of excipients and with the excipient that we have right now in front of a regulatory agency, we may follow through with that excipient under olimus platform as well which would give us even more acceleration on the next regulatory filing we believe.

As far as the next generation -- next hydrophilic, we have some really unique molecules we've been experimenting with for things like support catheter and guiding catheter in COT crossing that specially this whole peripheral below- the- knee segment with those very difficult vessel and calcification that we have found I would call really nice results and as I told R&D team I am hoping for some 510(k) here to build inning, we have a line up of three home runs and I would like to see a few more base hips in terms of 510(k) versus all PMA device.

So those are developing very well. .

And our next question comes from Michael Petusky with Barrington Research..

Good morning. I know you touched on this in the past but I was just wondering if you would be willing to share.

When you talk about good strategic fit in terms of corporate development, what are the top two or three or four characteristics of what would make up a good strategic fit for you guys?.

The first thing for me really is it has to accelerate transformation to become a whole product solution capability. And the two big components of that really are device design and development capabilities along with the ability to manufacture those devices.

So if you look at SurModics' three years from now and we have successfully licensed drug coated balloon on the O35 balloon platform we have now. We may be producing for that customer 50 to 100 plus thousand easily devices per year and increasing.

Added to that, we'll probably have an O14 below the knee balloon platform, different device and we maybe producing for clinical up to 20,000 and growing to another 100,000 upon commercialization. So first thing, we need the O35 balloon platform we have now is a terrific platform.

As you go to other vascular anatomies like below the knee or AV fistula with the short high pressure, we recognized it will be very difficult to specify a device from an OEM, we will need a proprietarily designed device, because the device we want will also be the best in breed for some tougher anatomies or some more specific anatomy.

So getting an acquisition where there is a team that has proficiency in designing those devices, designing specifically for our platform and then being able to manufacture is really important. So that it is our device at the end of the day and the transfer price and the margins we have scale from there.

An example and I'll give you just one example as an O14 balloon. When you put a drug on this balloon device, the drug takes up little space so when you rewrap and refold the balloon the original crossing profile to get through tight lesion is a little compromise. And so we need to know optimize the device design with the drug content and formulation.

So having the ability internally to get a tightest crossing profile even after we put in the drug is something we want to have internally. So that's the first element of what we are looking for. The second element is it would be great to have an immediately actionable pipeline of device.

As I was saying earlier I am confident and I feel really good with this the line up we have in our pipeline.

The one thing is they are all large markets, highly attainable market but many of them are P&A devices and so it would be terrific to have a suite of products that are more along the 510 (k) regulatory routes that will allow our coatings technology to participate on and get a another pipeline of what I would call the doubles and the triples to balance the home run part of the portfolio we have.

And so those two components are important. The device design capability and the actionable pipeline. Of course things like management, talent and the footprint and is got to be financially viable are the normal delimiters but those two is specially are the tip of the arrow for us. .

Okay. And then I guess on the guidance the increased earnings guidance, I guess I get that $0.04 of that relates to the revenue royalty catch up payment.

Does any of that increased guidance relate to projected lower R&D expense because the SurVeil pushed out into the next year? Is any of the balance of that increased guidance related to that or no?.

No. Mike, it is really -- it is a variety of different factors. Just a strong growth we've had in IVD business but we still anticipate been in the 5% to 7% growth in R&D for the year. The other piece I would also mention there too, if you look at the $0.04 per share was the impact in the current quarter.

And in the pro forma you see in the back release is that about $560,000 of one time payment related to periods prior to 2015. So it wasn't totally a $0.04 impact coming from for the total year guidance from that. It was just this quarterly impact for the amount that related to periods prior to the third quarter. .

Okay, yes, that's helpful. Then I guess just still last question. I am just more curious than anything else.

You guys did the ASR, to me if I do the math, if I am doing the math right it looks like the average cost to stock you repurchased was something like [23.58], I am just wondering were you happy with that in terms if you do reactivate the $10 million share repurchase authorization.

Would you go that route again or would you go more the -- more traditional route? Any comments on that. .

First of all, I'd say, yes, we were happy with the acquisition price of the shares and in terms of our next round of repurchase of shares, we've done three different methods over the last three to four months.

And we bought that I think 5.5 million shares into that period of time and we have gone through and we've done the Dutch, we've done the 10b25 and we've also done the ASR in this latest round. So there are advantages to doing each one and cost associated with each one.

And as we look at the current market price of the stock we decided to execute on one. We will decide which route to go. The advantage obviously doing the program we just did is to take a bunch of shares off the market up front. Otherwise you kind of bleeding the shares into the repurchase program.

But we have -- we made that decision if and when we decide to buyback additional shares. .

Yes. And you know and so also how we feel about the price ended on the specific rationale for that repurchase. As Andy said we've done three. Each of them had a different intent behind them.

And so if our buyer is to have some cash on hand to do M&A but we want to be opportunistic, then I don't want to speculate here but clearly the next go round maybe looking at the opportunism. So depending on what our intent is and the final prices is how we feel about it. And so far we feel very good. .

It appears there are no further questions. At this time, I'd like to the conference back to management for any additional or closing remarks..

Well, thank you for all of your questions. We are pleased with our 2015 first nine months performance and goal achieved. The SurModics team looks forward with optimism focus on generating profitable growth in our core business as we progress towards delivering whole product solutions to our customers.

This ensures that SurModics is relevant to our valued customers well into the future. Thank you everyone. .

This does conclude today's conferece. Thank you for your participation..