Vericel Reports Fourth Quarter and Year End 2017 Financial Results and Provides Full Year 2018 Financial Guidance
Record Quarterly Revenues of
Positive Operating and Net Income Reported for the Fourth Quarter
Conference Call Today at
Fourth Quarter 2017 Financial Highlights
- Total net revenues increased 41% to
$23.4 million compared to$16.5 million in the fourth quarter of 2016; excluding license revenue, net revenue increased 34% to$22.2 million ; - Gross margins of 64% compared to gross margins of 54% in the fourth quarter of 2016;
- Operating income of
$1.2 million , compared to operating loss of$5.9 million in the fourth quarter of 2016; - Net income of
$0.3 million , or$0.01 per share, compared to net loss of$6.2 million , or$0.34 per share, in the fourth quarter of 2016; and - As of
December 31, 2017 , the company had$26.9 million in cash compared to$23.0 million in cash at December 31, 2016.
Full Year 2017 Financial Highlights
- Total net revenue increased 18% to
$63.9 million compared to$54.4 million in 2016; excluding license revenue, net revenue increased 15% to$62.8 million ; - Gross margins of 53% compared to gross margins of 48% in 2016;
- Operating loss of
$15.0 million , compared to operating loss of$19.2 million in 2016; and - Net loss of
$17.3 million , or$0.52 per share, compared to net loss of$19.6 million , or$1.18 per share, in 2016.
Recent Business Highlights
During and since the fourth quarter of 2017, the company:
- Achieved record fourth quarter revenues and the third straight quarter of 30% or greater revenue growth versus the same quarter of the prior year;
- Trained approximately 600 surgeons on the MACI® (autologous cultured chondrocytes on porcine collage membrane) surgical procedure to date;
- Increased MACI biopsies 48% in the fourth quarter of 2017 compared to the same period in 2016, the second consecutive quarter with over 40% growth versus the same quarter of the prior year;
- Expanded the MACI sales force from 28 to 40 sales territories;
- Achieved significant growth in burn centers utilizing Epicel® (cultured epidermal autografts), with 40 burn centers utilizing Epicel in 2017 compared to 20 centers in 2014 when the business was acquired;
- Launched the MACI “It’s Your Move” campaign with world champion swimmer, five-time Olympian, best-selling author and recent MACI patient
Dara Torres to empower patients with knee pain to seek treatment; - Entered into an expanded
$25 million debt facility providing approximately$8 million of incremental capital; and - Initiated collaboration with Innovative Cellular Therapeutics (ICT), receiving
$5.1 million for the purchase of warrants and an upfront license fee.
“We had record fourth quarter revenues and achieved both positive operating income and net income for the quarter, an important milestone for the company,” said
Fourth Quarter 2017 Results
Total net revenues for the quarter ended
Gross profit for the quarter ended
Total operating expenses for the quarter ended
Income from operations for the quarter ended
Other expense for the quarter ended
Vericel’s net income for the quarter ended
Full Year 2017 Results
Total net revenues for the year ended
Gross profit for the year ended
Total operating expenses for the year ended
Loss from operations for the year ended
Other expense for the year ended
Vericel’s net loss for the year ended
As of
Full Year 2018 Financial Guidance
The company expects total net product revenues for the full year 2018, excluding additional license revenue, to be in the range of
“We successfully executed the launch of MACI and expanded Epicel utilization in 2017,” added Mr. Colangelo. “These successes, combined with a strong balance sheet and an expanded sales force in 2018, have positioned the company for continued 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-presentations until
About
Epicel®, Carticel®, and MACI® are registered trademarks of
This document contains forward-looking statements, including, without limitation, all of the information in the section captioned “Full Year 2018 Financial Guidance” and statements concerning anticipated progress, objectives and expectations regarding the commercial potential of our products and growth in revenues, intended product development, clinical activity timing, regulatory progress, 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, market adoption of our products, competitive developments, regulatory approval requirements, 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, clinical trial and product development activities 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:
crubin@troutgroup.com
+1 (646) 378-2947
lstern@troutgroup.com
+1 (646) 378-2922
| VERICEL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, amounts in thousands) |
||||||||
| December 31, | ||||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 26,862 | $ | 22,978 | ||||
| Accounts receivable (net of allowance for doubtful accounts of $249 and $225, respectively) | 18,270 | 17,093 | ||||||
| Inventory | 3,793 | 3,488 | ||||||
| Other current assets | 1,581 | 1,164 | ||||||
| Total current assets | 50,506 | 44,723 | ||||||
| Property and equipment, net | 4,071 | 3,875 | ||||||
| Total assets | $ | 54,577 | $ | 48,598 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,552 | $ | 6,535 | ||||
| Accrued expenses | 5,573 | 4,523 | ||||||
| Short term deferred rent | 420 | 3 | ||||||
| Warrant liabilities | 1,014 | 757 | ||||||
| Current portion of term loan credit agreement (net of deferred costs of $67 and $110, respectively) | 350 | 779 | ||||||
| Other | 181 | 256 | ||||||
| Total current liabilities | 13,090 | 12,853 | ||||||
| Revolving and term loan credit agreement (net of deferred costs of $196 and $293, respectively) | 16,888 | 9,318 | ||||||
| Long term deferred rent | 2,059 | 1,687 | ||||||
| Other long term debt | — | 32 | ||||||
| Total liabilities | 32,037 | 23,890 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Shareholders’ equity: | ||||||||
| Series B-2 non-voting convertible preferred stock, no par value: shares authorized and reserved — 39; shares issued and outstanding — 0 and 12, respectively | — | 38,389 | ||||||
| Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 35,861 and 31,595, respectively | 383,020 | 329,720 | ||||||
| Warrants | 397 | 190 | ||||||
| Accumulated deficit | (360,877 | ) | (343,591 | ) | ||||
| Total shareholders’ equity | 22,540 | 24,708 | ||||||
| Total liabilities and shareholders’ equity | $ | 54,577 | $ | 48,598 | ||||
| VERICEL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, amounts in thousands except per share amounts) |
||||||||||||||||
| Three Months Ended December 31, | Year ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Product sales, net | $ | 22,186 | $ | 16,523 | $ | 62,760 | $ | 54,383 | ||||||||
| Other | 1,164 | — | 1,164 | — | ||||||||||||
| Total revenue | $ | 23,350 | $ | 16,523 | $ | 63,924 | $ | 54,383 | ||||||||
| Cost of product sales | 8,389 | 7,591 | 30,354 | 28,307 | ||||||||||||
| Gross profit | 14,961 | 8,932 | 33,570 | 26,076 | ||||||||||||
| Research and development | 3,587 | 4,258 | 12,944 | 15,295 | ||||||||||||
| Selling, general and administrative | 10,183 | 7,925 | 35,610 | 27,388 | ||||||||||||
| Loss on impairment of intangible asset | — | 2,638 | — | 2,638 | ||||||||||||
| Total operating expenses | 13,770 | 14,821 | 48,554 | 45,321 | ||||||||||||
| Income (loss) from operations | 1,191 | (5,889 | ) | (14,984 | ) | (19,245 | ) | |||||||||
| Other income (expense): | -6 | -6 | ||||||||||||||
| (Increase) decrease in fair value of warrants | 255 | (99 | ) | (257 | ) | — | ||||||||||
| Loss on extinguishment of debt | (860 | ) | — | (860 | ) | — | ||||||||||
| Interest income | 8 | 1 | 14 | 8 | ||||||||||||
| Other (expense) income | (78 | ) | — | (92 | ) | (15 | ) | |||||||||
| Interest expense | (229 | ) | (210 | ) | (1,107 | ) | (314 | ) | ||||||||
| Total other (expense) income | (904 | ) | (308 | ) | (2,302 | ) | (321 | ) | ||||||||
| Net income (loss) | $ | 287 | $ | (6,197 | ) | $ | (17,286 | ) | $ | (19,566 | ) | |||||
| Net income (loss) per share attributable to common shareholders (Basic and Diluted) | $ | 0.01 | $ | (0.34 | ) | $ | (0.52 | ) | $ | (1.18 | ) | |||||
| Weighted average number of common shares outstanding (Basic) | 35,054 | 24,329 | 33,355 | 23,093 | ||||||||||||
| Weighted average number of common shares outstanding (Diluted) | 36,150 | 24,329 | 33,355 | 23,093 | ||||||||||||
Source: Vericel Corporation
