Vericel Reports First Quarter 2018 Financial Results
Record First Quarter Revenues of
Conference Call Today at
First Quarter 2018 Financial Highlights
- Total net revenues of
$18.0 million compared to$9.4 million in the first quarter of 2017; first quarter 2017 revenues included a$2.8 million revenue reserve for Carticel® and MACI® related to a contractual dispute between one of the Company’s pharmacy providers and a third-party payer; - Gross margins of 57% compared to gross margins of 24% in the first quarter of 2017;
- Net loss of
$7.7 million , or$0.21 loss per share, which included warrant-related expense of$2.9 million , compared to net loss of$9.8 million , or$0.31 per share, in the first quarter of 2017, which included$0.1 million of warrant income; - Non-GAAP adjusted EBITDA loss of
$2.6 million compared to a loss of$5.9 million in the first quarter of 2017; and - As of
March 31, 2018 , the company had$29.8 million in cash compared to$26.9 million in cash atDecember 31, 2017 .
Recent Business Highlights
During and since the first quarter of 2018, the company:
- Achieved record first quarter revenues and the fourth straight quarter of 30% or greater revenue growth versus the same quarter of the prior year;
- Achieved the Company’s first quarter of positive operating cash flow;
- Deployed the expanded MACI (autologous cultured chondrocytes on porcine collagen membrane) sales force, which increased from 28 to 40 sales representatives;
- Launched the MACI ‘It’s Your Move’ campaign in partnership with world champion swimmer, five-time Olympian, and best-selling author
Dara Torres ; and - Announced the publication of results from the Phase 3 SUMMIT Extension Study in the
American Journal of Sports Medicine demonstrating sustained clinical benefit of MACI out to five years.
“We had a strong start to 2018 with significant revenue growth for both MACI and Epicel, and delivered the fourth straight quarter of 30% or higher revenue growth compared to the same quarter of the prior year,” said
First Quarter 2018 Results
Total net revenues for the quarter ended
Gross profit for the quarter ended
Total operating expenses for the quarter ended
Loss from operations for the quarter ended
Other expense for the quarter ended
Non-GAAP adjusted EBITDA loss was
Vericel’s net loss for the quarter ended
As of
“Our first quarter results demonstrated continued momentum moving into our second year with MACI on the market and that investments made in Epicel are continuing to drive additional utilization,” added Mr. Colangelo. “We believe that an expanded MACI sales force in 2018, together with patient-focused marketing initiatives, will further strengthen our position in the market and build the foundation for strong revenue growth in the years ahead.”
Conference Call Information
Today's conference call will be available live at
If you are unable to participate in the live call, the webcast will be available at http://investors.vcel.com/events.cfm until
About
GAAP v. Non‑GAAP Measures
Epicel®, MACI® and Carticel® are registered trademarks of
This document contains forward-looking statements, including, without limitation, statements concerning anticipated progress, objectives and expectations regarding the commercial potential of our products and growth in revenues, and objectives and expectations regarding our company described herein, all of which involve certain risks and uncertainties. These statements are often, but are not always, made through the use of words or phrases such as "anticipates," "intends," "estimates," "plans," "expects," "we believe," "we intend," “guidance,” ”outlook,” “future,” and similar words or phrases, or future or conditional verbs such as "will," "would," "should," "potential," "could," "may," or similar expressions. Actual results may differ significantly from the expectations contained in the forward-looking statements. Among the factors that may result in differences are the inherent uncertainties associated with our expectations regarding 2018 revenues, our ability to achieve or sustain profitability, our need to generate significant sales to become profitable, potential fluctuations in sales volumes and our results of operations over the course of the year, competitive developments, estimating the commercial growth potential of our products and product candidates and growth in revenues and improvement in costs, market demand for our products, our ability to secure consistent reimbursement for our products, changes in third party coverage and reimbursement, any disruption or delays in operations at our facilities, our dependence on a limited number of third party suppliers, our ability to maintain and expand our network of direct sales employees, and our ability to supply or meet customer demand for our products. These and other significant factors are discussed in greater detail in
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Global Media Contacts:
Russo Partners LLC
+1 212-845-4271 (office)
+1 858-717-2310 (mobile)
David.schull@russopartnersllc.com
Russo Partners LLC
+1 646-942-5627 (office)
+1 917-547-0434 (mobile)
Karen.chase@russopartnersllc.com
Investor Contacts:
Solebury Trout
crubin@troutgroup.com
+1 (646) 378-2947
Solebury Trout
lstern@troutgroup.com
+1 (646) 378-2922
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, amounts in thousands)
| March 31, | December 31, | ||||||
| 2018 | 2017 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash | $ | 29,777 | $ | 26,862 | |||
| Accounts receivable (net of allowance for doubtful accounts of $315 and $249, respectively) | 13,162 | 18,270 | |||||
| Inventory | 3,905 | 3,793 | |||||
| Other current assets | 1,358 | 1,581 | |||||
| Total current assets | 48,202 | 50,506 | |||||
| Property and equipment, net | 4,207 | 4,071 | |||||
| Total assets | $ | 52,409 | $ | 54,577 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 5,768 | $ | 5,552 | |||
| Accrued expenses | 4,007 | 5,573 | |||||
| Short term deferred rent | 426 | 420 | |||||
| Current portion of term loan credit agreement (net of deferred costs of $69 and $67, respectively) | 1,597 | 350 | |||||
| Warrant liabilities | 1,921 | 1,014 | |||||
| Other | 159 | 181 | |||||
| Total current liabilities | 13,878 | 13,090 | |||||
| Revolving and term loan credit agreement (net of deferred costs of $185 and $196, respectively) | 15,649 | 16,888 | |||||
| Long term deferred rent | 1,947 | 2,059 | |||||
| Total liabilities | 31,474 | 32,037 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| Shareholders’ equity: | |||||||
| Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 36,502 and 35,861, respectively |
389,074 | 383,020 | |||||
| Warrants | 397 | 397 | |||||
| Accumulated deficit | (368,536 | ) | (360,877 | ) | |||
| Total shareholders’ equity | 20,935 | 22,540 | |||||
| Total liabilities and shareholders’ equity | $ | 52,409 | $ | 54,577 | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands except per share amounts)
| Three Months Ended March 31, | |||||||
| 2018 | 2017 | ||||||
| Product sales, net | $ | 18,027 | $ | 9,361 | |||
| Cost of product sales | 7,666 | 7,109 | |||||
| Gross profit | 10,361 | 2,252 | |||||
| Research and development | 3,729 | 3,467 | |||||
| Selling, general and administrative | 10,954 | 8,408 | |||||
| Total operating expenses | 14,683 | 11,875 | |||||
| Loss from operations | (4,322 | ) | (9,623 | ) | |||
| Other income (expense): | |||||||
| (Increase) decrease in fair value of warrants | (2,907 | ) | 107 | ||||
| Foreign currency translation (loss) | (44 | ) | (1 | ) | |||
| Interest income | — | 1 | |||||
| Interest expense | (432 | ) | (262 | ) | |||
| Other income | 46 | — | |||||
| Total other income (expense) | (3,337 | ) | (155 | ) | |||
| Net loss | $ | (7,659 | ) | $ | (9,778 | ) | |
| Net loss per share attributable to common shareholders (Basic and Diluted) | $ | (0.21 | ) | $ | (0.31 | ) | |
| Weighted average number of common shares outstanding (Basic and Diluted) | 36,140 | 31,896 | |||||
| RECONCILIATION OF REPORTED NET LOSS (GAAP) TO ADJUSTED EBITDA (NON-GAAP MEASURE) - UNAUDITED | ||||||||
| Three Months Ended March 31, | ||||||||
| (In thousands) | 2018 | 2017 | ||||||
| Net loss (GAAP) | $ | (7,659 | ) | $ | (9,778 | ) | ||
| Change in fair value of warrants | 2,907 | (107 | ) | |||||
| Revenue reserve related to a dispute between pharmacy provider and payer | — | 2,775 | ||||||
| Stock compensation expense | 1,342 | 502 | ||||||
| Depreciation and amortization | 427 | 409 | ||||||
| Net interest expense | 432 | 261 | ||||||
| Adjusted EBITDA (Non-GAAP) | $ | (2,551 | ) | $ | (5,938 | ) | ||
Source: Vericel Corporation
