Vericel Reports Record Second Quarter Revenues of $19.0 Million and Raises Full Year 2018 Revenue Guidance
Second Quarter 2018 Financial Highlights
- Total net revenues of
$19.0 million compared to$17.0 million in the second quarter of 2017; second quarter 2017 revenues included a favorable$1.4 million reversal of a 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 59% compared to gross margins of 55% on a GAAP basis and 51% on a non-GAAP basis excluding the impact of the revenue reserve reversal in the second quarter of 2017;
- Net loss of
$4.7 million , or$0.12 loss per share, compared to net loss of$2.4 million , or$0.07 per share on a GAAP basis and$3.7 million , or$0.11 per share, on a non-GAAP basis excluding the impact of the revenue reserve reversal, in the second quarter of 2017; - Non-GAAP adjusted EBITDA loss of
$1.4 million compared to a loss of$2.7 million in the second quarter of 2017; - As of
June 30, 2018 , the company had$95.0 million in cash compared to$26.9 million in cash atDecember 31, 2017 ; and - Full year 2018 revenue guidance raised to
$80 to $83 million compared to previous full year revenue guidance of$73 to $78 million .
Recent Business Highlights
During and since the second quarter of 2018, the company:
- Reported record second quarter revenues, marking the fifth consecutive quarter with record revenues for the reported quarter;
- Deployed the expanded MACI sales force, which increased from 28 to 40 sales representatives;
- Completed an expansion of MACI manufacturing capacity to support expected growth in MACI demand;
- Implemented an expanded pharmacy distribution network to continue expansion of MACI payer access;
- Closed a
$74.8 million public offering; and - Joined the Russell 3000® Index.
“We continued our strong start to 2018 with solid revenue growth and expanding margins in the second quarter, and we believe that key performance indicators point to continued robust growth for MACI in the second half of the year,” said
Second 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
Full Year 2018 Financial Guidance
The company now expects total net product revenues for the full year 2018 to be in the range of
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About
GAAP v. Non‑GAAP Measures
Epicel®, MACI® and Carticel® are registered trademarks of
This document contains forward-looking statements, including, without limitation, all of the statements in the last bullet under the section captioned “Second Quarter 2018 Financial Highlights” and in “Full Year 2018 Financial Guidance” and 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:
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David.schull@russopartnersllc.com
+1 212-845-4271 (office)
+1 858-717-2310 (mobile)
Russo Partners LLC
Karen.chase@russopartnersllc.com
+1 646-942-5627 (office)
+1 917-547-0434 (mobile)
Investor Contacts:
Solebury Trout
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+1 (646) 378-2947
Solebury Trout
lstern@troutgroup.com
+1 (646) 378-2922
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, amounts in thousands)
| June 30, | December 31, | |||||||
| 2018 | 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 94,969 | $ | 26,862 | ||||
| Accounts receivable (net of allowance for doubtful accounts of $102 and $249, respectively) | 17,499 | 18,270 | ||||||
| Inventory | 3,725 | 3,793 | ||||||
| Other current assets | 1,327 | 1,581 | ||||||
| Total current assets | 117,520 | 50,506 | ||||||
| Property and equipment, net | 4,673 | 4,071 | ||||||
| Total assets | $ | 122,193 | $ | 54,577 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,011 | $ | 5,552 | ||||
| Accrued expenses | 5,111 | 5,573 | ||||||
| Deferred rent | 503 | 420 | ||||||
| Current portion of term loan credit agreement (net of deferred costs of $69 and $67, respectively) | 2,848 | 350 | ||||||
| Warrant liabilities | 1,549 | 1,014 | ||||||
| Other | 198 | 181 | ||||||
| Total current liabilities | 15,220 | 13,090 | ||||||
| Revolving and term loan credit agreement (net of deferred costs of $167 and $196, respectively) | 14,416 | 16,888 | ||||||
| Deferred rent | 1,959 | 2,059 | ||||||
| Total liabilities | 31,595 | 32,037 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 42,684 and 35,861, respectively | 463,483 | 383,020 | ||||||
| Warrants | 302 | 397 | ||||||
| Accumulated deficit | (373,187 | ) | (360,877 | ) | ||||
| Total shareholders’ equity | 90,598 | 22,540 | ||||||
| Total liabilities and shareholders’ equity | $ | 122,193 | $ | 54,577 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Product sales, net | $ | 19,011 | $ | 16,953 | $ | 37,038 | $ | 26,314 | ||||||||
| Cost of product sales | 7,727 | 7,670 | 15,393 | 14,779 | ||||||||||||
| Gross profit | 11,284 | 9,283 | 21,645 | 11,535 | ||||||||||||
| Research and development | 3,739 | 2,971 | 7,468 | 6,438 | ||||||||||||
| Selling, general and administrative | 11,791 | 8,833 | 22,745 | 17,241 | ||||||||||||
| Total operating expenses | 15,530 | 11,804 | 30,213 | 23,679 | ||||||||||||
| Loss from operations | (4,246 | ) | (2,521 | ) | (8,568 | ) | (12,144 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| (Increase) decrease in fair value of warrants | (37 | ) | 441 | (2,944 | ) | 548 | ||||||||||
| Foreign currency translation loss | (5 | ) | (13 | ) | (49 | ) | (14 | ) | ||||||||
| Interest income | 83 | 3 | 83 | 4 | ||||||||||||
| Interest expense | (448 | ) | (299 | ) | (880 | ) | (561 | ) | ||||||||
| Other income | 2 | 1 | 48 | 1 | ||||||||||||
| Total other income (expense) | (405 | ) | 133 | (3,742 | ) | (22 | ) | |||||||||
| Net loss | $ | (4,651 | ) | $ | (2,388 | ) | $ | (12,310 | ) | $ | (12,166 | ) | ||||
| Net loss per share attributable to common shareholders (Basic and Diluted) | $ | (0.12 | ) | $ | (0.07 | ) | $ | (0.33 | ) | $ | (0.38 | ) | ||||
| Weighted average number of common shares outstanding (Basic and Diluted) | 38,349 | 32,765 | 37,251 | 32,333 | ||||||||||||
| RECONCILIATION OF REPORTED GROSS MARGIN (GAAP) TO ADJUSTED GROSS MARGIN (NON-GAAP MEASURE) - UNAUDITED |
|||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| (In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Total Revenues (GAAP) | $ | 19,011 | $ | 16,953 | $ | 37,038 | $ | 26,314 | |||||||||
| Revenue reserve related to a dispute between pharmacy provider and payer | — | (1,357 | ) | — | 1,418 | ||||||||||||
| Total Revenues (Non-GAAP) | $ | 19,011 | $ | 15,596 | $ | 37,038 | $ | 27,732 | |||||||||
| Gross profit (GAAP) | $ | 11,284 | $ | 9,283 | $ | 21,645 | $ | 11,535 | |||||||||
| Revenue reserve related to a dispute between pharmacy provider and payer | — | (1,357 | ) | — | 1,418 | ||||||||||||
| Adjusted gross profit (Non-GAAP) | $ | 11,284 | $ | 7,926 | $ | 21,645 | $ | 12,953 | |||||||||
| Adjusted gross margin (Non-GAAP) | 59 | % | 51 | % | 58 | % | 47 | % | |||||||||
| RECONCILIATION OF REPORTED NET LOSS (GAAP) TO ADJUSTED EBITDA (NON-GAAP MEASURE) - UNAUDITED |
||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (In thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net loss (GAAP) | $ | (4,651 | ) | $ | (2,388 | ) | $ | (12,310 | ) | $ | (12,166 | ) | ||||
| Change in fair value of warrants | 37 | (441 | ) | 2,944 | (548 | ) | ||||||||||
| Revenue reserve related to a dispute between pharmacy provider and payer | — | (1,357 | ) | — | 1,418 | |||||||||||
| Stock compensation expense | 2,465 | 796 | 3,807 | 1,298 | ||||||||||||
| Depreciation and amortization | 386 | 375 | 813 | 784 | ||||||||||||
| Net interest expense | 365 | 296 | 797 | 557 | ||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | (1,398 | ) | $ | (2,719 | ) | $ | (3,949 | ) | $ | (8,657 | ) | ||||
| RECONCILIATION OF REPORTED LOSS PER SHARE (GAAP) TO ADJUSTED LOSS PER SHARE (NON-GAAP MEASURE) - UNAUDITED |
|||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| (In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net loss (GAAP) | (4,651 | ) | (2,388 | ) | (12,310 | ) | (12,166 | ) | |||||||||
| Revenue reserve related to a dispute between pharmacy provider and payer | — | (1,357 | ) | — | 1,418 | ||||||||||||
| Net loss (Non-GAAP) | $ | (4,651 | ) | $ | (3,745 | ) | $ | (12,310 | ) | $ | (10,748 | ) | |||||
| Net loss per share attributable to common shareholders (Basic and Diluted) (Non-GAAP) | $ | (0.12 | ) | $ | (0.11 | ) | $ | (0.33 | ) | $ | (0.33 | ) | |||||
Source: Vericel Corporation
