Neuronetics Reports Second Quarter 2019 Financial and Operating Results
Second Quarter 2019 Highlights
- Second quarter 2019 revenue of
$16.6 million , an increase of 25% over the second quarter of 2018 - Second quarter 2019 U.S. treatment session revenue of
$10.8 million , an increase of 22% over the second quarter of 2018 - Second quarter 2019 U.S. NeuroStar® Advanced Therapy revenue of
$4.6 million , an increase of 30% over the second quarter of 2018
Second Quarter 2019 Financial and Operating Results
“We are very happy with our continued strong performance in the second quarter, particularly as this represents the fifth consecutive quarter since becoming a public company in which we delivered greater than 20% topline growth,” said
Revenues by Geography | ||||||||||||
Three Months ended June 30, | ||||||||||||
2019 | 2018 | |||||||||||
Amount | Amount | % Change | ||||||||||
(in thousands, except percentages) | ||||||||||||
United States | $ | 15,890 | $ | 12,898 | 23 | % | ||||||
International | 682 | 354 | 93 | % | ||||||||
Total revenues | $ | 16,572 | $ | 13,252 | 25 | % |
United States Revenues by Product Category | ||||||||||||
Three Months ended June 30, | ||||||||||||
2019 | 2018 | |||||||||||
Amount | Amount | % Change | ||||||||||
(in thousands, except percentages) | ||||||||||||
NeuroStar Advanced Therapy System | $ | 4,628 | $ | 3,568 | 30 | % | ||||||
Treatment sessions | 10,847 | 8,920 | 22 | % | ||||||||
Other | 415 | 410 | 1 | % | ||||||||
Total United States revenues | $ | 15,890 | $ | 12,898 | 23 | % |
U.S. NeuroStar Advanced Therapy revenue for the second quarter of 2019 was
As of June 30, 2019, the active unit installed base in the U.S. was 976. This represents an increase of 160 units over the active unit installed base as of June 30, 2018, and an increase of 45 units over the active installed base as of
U.S. Treatment Session revenue for the second quarter of 2019 was
Gross margin for the second quarter of 2019 was 74.8%, which is slightly lower than the second quarter of 2018 gross margin of 75.5%. The decrease in gross margin was the result of a higher mix of NeuroStar Advanced Therapy revenue and the selling price decreases noted above, partially offset by increased leverage on our service and operations costs as a result of higher sales compared to the prior year period.
Operating expenses during the second quarter of 2019 were
Net loss for the second quarter of 2019 was
EBITDA for the second quarter of 2019 was
Cash and cash equivalents were
Business Outlook
For the third quarter of 2019, the Company expects total worldwide revenue of between
For the full year 2019, the Company now expects to report total worldwide revenue of between
For the full year 2019, the Company continues to expect gross margins to be in the mid 70% range, in line with full year 2018 margins.
For the full year 2019, the Company now expects operating expenses to be between
Webcast and Conference Call Information
Neuronetics’ management team will host a conference call on
About
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:
Statements in the press release regarding
Investor Contact:
Westwicke Partners
443-213-0501
ir@neuronetics.com
Media Contact:
610-455-2742
Lbrown@vaultcommunications.com
NEURONETICS, INC. Statements of Operations (Unaudited; In thousands, except per share data) |
||||||||||||||||
Three Months ended | Six Months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenues | $ | 16,572 | $ | 13,252 | $ | 29,300 | $ | 23,404 | ||||||||
Cost of revenues | 4,171 | 3,245 | 6,978 | 5,702 | ||||||||||||
Gross Profit | 12,401 | 10,007 | 22,322 | 17,702 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 11,523 | 9,835 | 21,115 | 17,944 | ||||||||||||
General and administrative | 4,261 | 3,078 | 8,860 | 5,714 | ||||||||||||
Research and development | 3,224 | 2,330 | 6,010 | 3,885 | ||||||||||||
Total operating expenses | 19,008 | 15,243 | 35,985 | 27,543 | ||||||||||||
Loss from Operations | (6,607 | ) | (5,236 | ) | (13,663 | ) | (9,841 | ) | ||||||||
Other (income) expense: | ||||||||||||||||
Interest expense | 931 | 900 | 1,850 | 1,821 | ||||||||||||
Other expense (income), net | (444 | ) | 1,360 | (890 | ) | 1,331 | ||||||||||
Net Loss | $ | (7,094 | ) | $ | (7,496 | ) | $ | (14,623 | ) | $ | (12,993 | ) | ||||
Net loss per share of common stock outstanding, basic and diluted | $ | (0.39 | ) | $ | (30.60 | ) | $ | (0.80 | ) | $ | (55.29 | ) | ||||
Weighted-average common shares outstanding, basic and diluted | 18,351 | 245 | 18,189 | 235 |
NEURONETICS, INC. Balance Sheets (Unaudited; In thousands, except per share data) |
||||||||
June 30, 2019 |
December 31, 2018 |
|||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 89,644 | $ | 104,583 | ||||
Accounts receivable, net | 7,563 | 5,620 | ||||||
Inventory | 2,552 | 2,432 | ||||||
Current portion of net investments in sales-type leases | 240 | - | ||||||
Current portion of prepaid commission expense | 237 | - | ||||||
Prepaid expenses and other current assets | 1,061 | 1,838 | ||||||
Total current assets | 101,297 | 114,473 | ||||||
Property and equipment, net | 1,105 | 1,378 | ||||||
Operating lease right-of-use assets | 3,998 | - | ||||||
Net investments in sales-type leases | 400 | - | ||||||
Prepaid commission expense | 1,342 | - | ||||||
Other assets | 1,284 | 1,171 | ||||||
Total Assets | $ | 109,426 | $ | 117,022 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,659 | $ | 3,756 | ||||
Accrued expenses | 6,476 | 7,548 | ||||||
Deferred revenue | 2,206 | 2,255 | ||||||
Current portion of operating lease liabilities | 516 | - | ||||||
Current portion of long-term debt, net | 3,750 | - | ||||||
Total current liabilities | 16,607 | 13,559 | ||||||
Long-term debt, net | 27,007 | 30,395 | ||||||
Deferred revenue | 2,351 | 1,940 | ||||||
Operating lease liabilities | 3,642 | - | ||||||
Deferred rent | - | 86 | ||||||
Total Liabilities | 49,607 | 45,980 | ||||||
Stockholders’ Equity : | ||||||||
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding at June 30, 2019 and December 31, 2018 |
- | - | ||||||
Common stock, $0.01 par value: 200,000 shares authorized; 18,445 and 17,744 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively |
184 | 177 | ||||||
Additional paid-in capital | 295,301 | 291,908 | ||||||
Accumulated deficit | (235,666 | ) | (221,043 | ) | ||||
Total Stockholders' Equity | 59,819 | 71,042 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 109,426 | $ | 117,022 |
NEURONETICS, INC. Statements of Cash Flows (Unaudited; In thousands) |
||||||||
Six Months ended June 30, | ||||||||
2019 | 2018 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (14,623 | ) | $ | (12,993 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 457 | 463 | ||||||
Share-based compensation | 1,523 | 336 | ||||||
Non-cash interest expense | 362 | 441 | ||||||
Change in fair value of convertible preferred stock warrant liability | - | 1,415 | ||||||
Cost of rental units purchased by customers | 77 | 79 | ||||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable, net | (1,216 | ) | (457 | ) | ||||
Inventory | (82 | ) | (378 | ) | ||||
Net investment in sales-type leases | (640 | ) | - | |||||
Prepaid commission expense | (1,579 | ) | - | |||||
Prepaid expenses and other assets | 941 | 380 | ||||||
Accounts payable | (228 | ) | (89 | ) | ||||
Accrued expenses | (1,044 | ) | (2,130 | ) | ||||
Deferred revenue | (366 | ) | (435 | ) | ||||
Deferred rent | - | (29 | ) | |||||
Net Cash Used in Operating Activities | (16,418 | ) | (13,397 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment and capitalized software | (398 | ) | (513 | ) | ||||
Net Cash Used in Investing Activities | (398 | ) | (513 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Payments of public offering costs | - | (731 | ) | |||||
Proceeds from exercises of stock options | 1,877 | 38 | ||||||
Net Cash Provided by (Used in) Financing Activities | 1,877 | (693 | ) | |||||
Net (Decrease) in Cash and Cash Equivalents | (14,939 | ) | (14,603 | ) | ||||
Cash and Cash Equivalents, Beginning of Period | 104,583 | 29,147 | ||||||
Cash and Cash Equivalents, End of Period | $ | 89,644 | $ | 14,544 |
Non-GAAP Financial Measures
EBITDA is not a measure of financial performance under generally accepted accounting principles in
The following table reconciles reported net loss to EBITDA:
Three Months ended | Six Months ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
EBITDA Reconciliation | (in thousands) | (in thousands) | |||||||||||||||
Net loss | $ | (7,094 | ) | $ | (7,496 | ) | $ | (14,623 | ) | $ | (12,993 | ) | |||||
Interest expense | 931 | 900 | 1,850 | 1,821 | |||||||||||||
Income taxes | - | - | - | - | |||||||||||||
Depreciation and amortization | 253 | 324 | 457 | 463 | |||||||||||||
EBITDA | $ | (5,910 | ) | $ | (6,272 | ) | $ | (12,316 | ) | $ | (10,709 | ) |
Source: Neuronetics