Neuronetics Reports Fourth Quarter and Full Year 2018 Financial and Operating Results
Fourth Quarter 2018 Highlights
- Fourth quarter 2018 revenue of
$15.6 million , an increase of 29% over the fourth quarter of 2017 - Fourth quarter 2018 U.S. treatment session revenue of
$9.9 million , an increase of 23% over the fourth quarter of 2017 - Fourth quarter 2018 U.S. NeuroStar® Advanced Therapy revenue of
$4.8 million , an increase of 37% over the fourth quarter of 2017, driven by a 46% increase in capital revenue growth
Full Year 2018 Highlights
- Full year 2018 revenue of
$52.8 million , an increase of 31% over the prior year - Full year 2018 U.S. treatment session revenue of
$35.3 million , an increase of 24% over the prior year - Full year 2018 U.S. NeuroStar Advanced Therapy revenue of
$14.6 million , an increase of 44% over the prior year, driven by a 59% increase in capital revenue growth
Fourth Quarter Financial and Operating Results
“The fourth quarter of 2018 was very strong for the company as we continued to drive adoption of NeuroStar Advanced Therapy, both in new system placements and into targeted high-volume practices as well as increasing overall system usage,” said
Revenues by Geography | |||||||||
Three months ended December 31, | |||||||||
2018 | 2017 | ||||||||
Amount | Amount | % Change | |||||||
(in thousands, except percentages) | |||||||||
United States | $ | 15,089 | $ | 11,836 | 27 | % | |||
International | 546 | 272 | 101 | % | |||||
Total revenues | $ | 15,635 | $ | 12,108 | 29 | % | |||
United States Revenues by Product Category | |||||||||
Three months ended December 31, | |||||||||
2018 | 2017 | ||||||||
Amount | Amount | % Change | |||||||
(in thousands, except percentages) | |||||||||
NeuroStar Advanced Therapy System | $ | 4,754 | $ | 3,460 | 37 | % | |||
Treatment sessions | 9,909 | 8,025 | 23 | % | |||||
Other | 426 | 351 | 21 | % | |||||
Total United States revenues | $ | 15,089 | $ | 11,836 | 27 | % | |||
U.S. NeuroStar Advanced Therapy revenue for the fourth quarter of 2018 was
As of
U.S. Treatment Session revenue for the fourth quarter of 2018 was
Gross margin for the fourth quarter of 2018 was 76.3%, which is higher than the fourth quarter of 2017 gross margin of 75.6%. The majority of the increase in gross margin was the result of increased leverage on our service and operations costs as a result of higher sales compared to the prior year period.
Operating expenses during the fourth quarter of 2018 were
Net loss for the fourth quarter of 2018 was
EBITDA for the fourth quarter of 2018 was
Cash and cash equivalents were
Full Year Financial and Operating Results
“2018 was a very successful year as we were able to bring relief to a greater number of patients suffering from MDD while at the same time maintaining a high level of growth in the overall business,” said
Revenues by Geography | |||||||||
Year ended December 31, | |||||||||
2018 | 2017 | ||||||||
Amount | Amount | % Change | |||||||
(in thousands, except percentages) | |||||||||
United States | $ | 51,477 | $ | 39,853 | 29 | % | |||
International | 1,299 | 580 | 124 | % | |||||
Total revenues | $ | 52,776 | $ | 40,433 | 31 | % |
United States Revenues by Product Category | |||||||||
Year ended December 31, | |||||||||
2018 | 2017 | ||||||||
Amount | Amount | % Change | |||||||
(in thousands, except percentages) | |||||||||
NeuroStar Advanced Therapy System | $ | 14,603 | $ | 10,120 | 44 | % | |||
Treatment sessions | 35,287 | 28,391 | 24 | % | |||||
Other | 1,587 | 1,342 | 18 | % | |||||
Total United States revenues | $ | 51,477 | $ | 39,853 | 29 | % | |||
U.S. NeuroStar Advanced Therapy Revenue for the full year 2018 was
U.S. Treatment Session revenue for the full year 2018 was
Gross margin for the full year 2018 was 76.4%, which was slightly higher than the full year 2017 gross margin of 76.2%. Gross margin was higher due to increased leverage on our service and operations costs, which were partially offset by the higher mix of NeuroStar Advanced Therapy System revenues in 2018 in relation to treatment sessions revenues and the reduction in the average selling price of our treatment sessions.
Operating expenses during the full year 2018 were
Net loss for the full year 2018 was
EBITDA for the full year 2018 was
Business Outlook
For the full year 2019, the Company expects to report total worldwide revenue of between
For the full year 2019, the Company expects gross margins to be in the mid 70% range, in line with full year 2018 margins.
For the full year 2019, the Company expects operating expenses to be between
For the first quarter of 2019, the Company expects total worldwide revenue of 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) |
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Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues | $ | 15,635 | $ | 12,108 | $ | 52,776 | $ | 40,433 | ||||||||
Cost of revenues | 3,711 | 2,957 | 12,447 | 9,632 | ||||||||||||
Gross Profit | 11,924 | 9,151 | 40,329 | 30,801 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 10,648 | 8,628 | 38,264 | 27,900 | ||||||||||||
General and administrative | 4,715 | 2,837 | 13,667 | 8,572 | ||||||||||||
Research and development | 2,222 | 1,919 | 8,232 | 7,937 | ||||||||||||
Total operating expenses | 17,585 | 13,384 | 60,163 | 44,409 | ||||||||||||
Loss from Operations | (5,661 | ) | (4,233 | ) | (19,834 | ) | (13,608 | ) | ||||||||
Other (income) expense: | ||||||||||||||||
Interest expense | 939 | 740 | 3,688 | 2,808 | ||||||||||||
Other expense (income), net | (457 | ) | (49 | ) | 575 | (357 | ) | |||||||||
Net Loss | $ | (6,143 | ) | $ | (4,924 | ) | $ | (24,097 | ) | $ | (16,059 | ) | ||||
Net loss per share of common stock outstanding, basic and diluted | $ | (0.35 | ) | $ | (23.34 | ) | $ | (2.69 | ) | $ | (86.34 | ) | ||||
Weighted-average common shares outstanding, basic and diluted | $ | 17,655 | $ | 211 | $ | 8,948 | $ | 186 |
NEURONETICS, INC. Balance Sheets (Unaudited; In thousands, except per share data) |
||||||||
December 31, | ||||||||
2018 | 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 104,583 | $ | 29,147 | ||||
Accounts receivable, net | 5,620 | 4,267 | ||||||
Inventory | 2,432 | 2,468 | ||||||
Prepaid expenses and other current assets | 1,838 | 1,123 | ||||||
Total current assets | 114,473 | 37,005 | ||||||
Property and equipment, net | 1,378 | 1,359 | ||||||
Other assets | 1,171 | 574 | ||||||
Total Assets | $ | 117,022 | $ | 38,938 | ||||
Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,756 | $ | 2,513 | ||||
Accrued expenses | 7,548 | 7,511 | ||||||
Deferred revenue | 2,255 | 1,970 | ||||||
Total current liabilities | 13,559 | 11,994 | ||||||
Long-term debt, net | 30,395 | 29,556 | ||||||
Deferred revenue | 1,940 | 2,275 | ||||||
Deferred rent | 86 | 151 | ||||||
Convertible preferred stock warrant liability | - | 478 | ||||||
Total Liabilities | 45,980 | 44,454 | ||||||
Convertible preferred stock, $0.01 par value: 308,593 shares previously authorized prior to initial public offering, issuable in series; no and 304,958 shares issued and outstanding at December 31, 2018 and 2017, respectively; no liquidation value at December 31, 2018 |
- | 187,136 | ||||||
Stockholders' Equity (Deficit): | ||||||||
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding at December 31, 2018 and December 31, 2017 |
- | - | ||||||
Common stock, $0.01 par value: 200,000 shares authorized; 17,744 and 231 shares issued and outstanding at December 31, 2018 and 2017, respectively |
177 | 2 | ||||||
Additional paid-in capital | 291,908 | 4,292 | ||||||
Accumulated deficit | (221,043 | ) | (196,946 | ) | ||||
Total Stockholders' Equity (Deficit) | 71,042 | (192,652 | ) | |||||
Total Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit) | $ | 117,022 | $ | 38,938 |
NEURONETICS, INC. Statements of Cash Flows (Unaudited; In thousands) |
||||||||
Year ended | ||||||||
December 31, | ||||||||
2018 | 2017 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (24,097 | ) | $ | (16,059 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 882 | 596 | ||||||
Share-based compensation | 1,743 | 496 | ||||||
Non-cash interest expense | 839 | 722 | ||||||
Change in fair value of convertible preferred stock warrant liability | 1,396 | (271 | ) | |||||
Cost of rental units purchased by customers | 229 | 216 | ||||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable, net | (1,353 | ) | (690 | ) | ||||
Inventory | (435 | ) | (1,068 | ) | ||||
Prepaid expenses and other assets | (237 | ) | (175 | ) | ||||
Accounts payable | 606 | 788 | ||||||
Accrued expenses | (52 | ) | 1,391 | |||||
Deferred revenue | (49 | ) | 2,915 | |||||
Deferred rent | (63 | ) | (5 | ) | ||||
Net Cash Used in Operating Activities | (20,591 | ) | (11,144 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment and capitalized software | (1,011 | ) | (594 | ) | ||||
Net Cash Used in Investing Activities | (1,011 | ) | (594 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from issuance of common stock in initial public offering | 99,998 | - | ||||||
Payments of public offering costs | (3,463 | ) | - | |||||
Proceeds from exercises of stock options | 503 | 35 | ||||||
Proceeds from issuance of Series G convertible preferred stock, net | - | 14,825 | ||||||
Borrowings under credit facilities | - | 10,000 | ||||||
Payments of debt issuance costs | - | (1,015 | ) | |||||
Net Cash Provided by Financing Activities | 97,038 | 23,845 | ||||||
Net Increase in Cash and Cash Equivalents | 75,436 | 12,107 | ||||||
Cash and Cash Equivalents, Beginning of Year | 29,147 | 17,040 | ||||||
Cash and Cash Equivalents, End of Year | $ | 104,583 | $ | 29,147 |
Non-GAAP Financial Measures
EBITDA is not a measure of financial performance under generally accepted accounting principles (GAAP) and should not be construed as a substitute for, or superior to, GAAP net loss. However, management uses both the GAAP and non-GAAP financial measures internally to evaluate and manage the Company’s operations and to better understand its business. Further, management believes the addition of the non-GAAP financial measure provides meaningful supplementary information to, and facilitates analysis by, investors in evaluating the Company’s financial performance, results of operations and trends. The Company’s calculation of EBITDA may not be comparable to similarly designated measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment.
The following table reconciles reported net loss to EBITDA:
Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
EBITDA Reconciliation | (in thousands) | (in thousands) | ||||||||||||||
Net loss | $ | (6,143 | ) | $ | (4,924 | ) | $ | (24,097 | ) | $ | (16,059 | ) | ||||
Interest expense | 939 | 740 | 3,688 | 2,808 | ||||||||||||
Depreciation and amortization | 211 | 141 | 882 | 596 | ||||||||||||
EBITDA | $ | (4,993 | ) | $ | (4,043 | ) | $ | (19,527 | ) | $ | (12,655 | ) |