Neuronetics Reports Fourth Quarter and Full Year 2021 Financial and Operating Results
Fourth Quarter 2021 Highlights
- Exceeded guidance - Fourth quarter 2021 revenue of
$15.0 million , exceeded previously issued guidance of$13.0 to$14.0 million - Increased revenue - Fourth quarter 2021 revenue increased 9% sequentially as compared to third quarter 2021
- Achieved record-breaking quarterly treatment session revenue - Fourth quarter 2021 U.S. treatment session revenue of
$11.2 million , compared to$11.0 million in fourth quarter 2020
Full Year 2021 Highlights
- Exceeded guidance - Full year 2021 revenue of
$55.3 million , exceeded previously issued guidance of$53.3 to$54.3 million - Full year 2021 U.S. treatment session revenue of
$41.9 million - Full year 2021 U.S. NeuroStar Advanced Therapy revenue of
$9.8 million
Recent Operational Highlights
- Attained 510(k) clearance of innovative MT Cap technology for NeuroStar, designed to make the motor threshold determination process simpler and more efficient for clinicians and patients
- Launched software innovation with FastMT™ and SoftStart™ to enhance NeuroStar Advanced Therapy System
- Expanded HCP education and adoption with 3rd and 4th NeuroStar Summits in November, 2021 and
March 2022 , respectively, with approximately 170 prospective customers attending - Amended existing credit facility with SLR Investment Corp, modifying the Company’s ability to extend the interest only period and resetting certain revenue covenants
Recent Marketing Highlights
- Increased key performance metrics with patients taking action to request a physician consultation through the Neurostar.com Physician Locator up, +67% increase vs. 2020
- Demonstrated category leadership with the highest Share of Voice up from 60% to 71% from 2020 to 2021
- Strengthened co-op program, Precision Pulse, launched in
April 2021 , showed steady increases quarter upon quarter in number of participants and dollars spent as customers took advantage of 50% co-op reimbursement at varying levels - Initiated partnership with social media influencer and KOL, Dr.
Melissa Shepard , to expand NeuroStar reach to new audience of over one millionTikTok followers and over eighty thousand Instagram followers
“2021 was a transformational year for
Fourth Quarter 2021 Financial and Operating Results for the Three Months Ended
| Revenues by Geography | |||||||||||
| Three Months Ended |
|||||||||||
| 2021 | 2020 | ||||||||||
| Amount | Amount | % Change | |||||||||
| (in thousands, except percentages) | |||||||||||
| $ | 14,556 | $ | 15,046 | (3 | )% | ||||||
| International | 466 | 533 | (13 | )% | |||||||
| Total revenues | $ | 15,022 | $ | 15,579 | (4 | )% | |||||
Total revenue for the three months ended
| U.S. Revenues by Product Category | |||||||||||
| Three Months Ended |
|||||||||||
| 2021 | 2020 | ||||||||||
| Amount | Amount | % Change | |||||||||
| (in thousands, except percentages) | |||||||||||
| NeuroStar Advanced Therapy System | $ | 2,815 | $ | 3,620 | (22 | )% | |||||
| Treatment sessions | 11,245 | 11,029 | 2 | % | |||||||
| Other | 496 | 397 | 25 | % | |||||||
| Total |
$ | 14,556 | $ | 15,046 | (3 | )% | |||||
| U.S. NeuroStar Advanced Therapy System | |||||||||||
| Revenues by Type | |||||||||||
| Three Months Ended |
|||||||||||
| 2021 | 2020 | ||||||||||
| Amount | Amount | % Change | |||||||||
| (in thousands, except percentages) | |||||||||||
| $ | 2,513 | $ | 3,445 | (27 | )% | ||||||
| Operating lease | 85 | 79 | 7 | % | |||||||
| Other | 217 | 96 | 126 | % | |||||||
| Total United States NeuroStar Advanced Therapy System revenues | $ | 2,815 | $ | 3,620 | (22 | )% | |||||
In the fourth quarter,
Gross margin for the fourth quarter of 2021 was 76.4%, an increase of approximately 60 basis points from the fourth quarter of 2020 gross margin of 75.8%. The increase was primarily a result of higher average sales prices of our NeuroStar Advanced Therapy System units and a higher mix of treatment session revenue in the fourth quarter of 2021.
Operating expenses during the fourth quarter of 2021 were
Net loss for the fourth quarter of 2021 was
EBITDA for the fourth quarter of 2021 was
Full Year Financial and Operating Results
| Revenues by Geography | |||||||||||
| Year Ended |
|||||||||||
| 2021 | 2020 | ||||||||||
| Amount | Amount | % Change |
|||||||||
| (in thousands, except percentages) | |||||||||||
| $ | 53,447 | $ | 47,519 | 12 | % | ||||||
| International | 1,865 | 1,725 | 8 | % | |||||||
| Total revenues | $ | 55,312 | $ | 49,244 | 12 | % | |||||
Total revenues increased by
| U.S. Revenues by Product Category | |||||||||||
| Year Ended |
|||||||||||
| 2021 | 2020 | ||||||||||
| Amount | Amount | % Change | |||||||||
| (in thousands, except percentages) | |||||||||||
| NeuroStar Advanced Therapy System | $ | 9,760 | $ | 11,094 | (12 | )% | |||||
| Treatment sessions | 41,933 | 34,852 | 20 | % | |||||||
| Other | 1,754 | 1,573 | 12 | % | |||||||
| Total |
$ | 53,447 | $ | 47,519 | 12 | % | |||||
| U.S. NeuroStar Advanced Therapy System | |||||||||||
| Revenues by Type | |||||||||||
| Year Ended |
|||||||||||
| 2021 | 2020 | ||||||||||
| Amount | Amount | % Change | |||||||||
| (in thousands, except percentages) | |||||||||||
| $ | 8,820 | $ | 10,518 | (16 | )% | ||||||
| Operating lease | 279 | 437 | (36 | )% | |||||||
| Other | 661 | 139 | 376 | % | |||||||
| Total United States NeuroStar Advanced Therapy System revenues | $ | 9,760 | $ | 11,094 | (12 | )% | |||||
Gross margin for the full year 2021 was 78.9%, an increase of approximately 240 basis points from the full year 2020 gross margin of 76.5%. The increase in gross margin was the result of a higher mix of treatment session revenue for the full year 2021.
Operating expenses during the full year 2021 were
Net loss for the full year 2021 was
EBITDA for the full year 2021 was
Cash and cash equivalents were
MT Cap FDA 510(k) Clearance and
In December of 2021, the Company received 510(k) clearance on their MT Cap technology for NeuroStar® Advanced Therapy for Mental Health. The MT Cap provides a target starting location and step-by-step map to guide the process of identifying a patient’s motor threshold (MT) and reduce multiple steps during the initial assessment for NeuroStar. The MT Cap leverages NeuroStar’s unique floating coil locking system, making mapping and determining motor thresholds seamless. Determining and locating a patient’s motor threshold is a critical component of the treatment process and can take up to 30 minutes for each patient. Now, when the MT Cap is combined with the recently launched FastMT™, these technology innovations provide an average 40% time savings during the MT activity. In March of 2022, the Company announced the nationwide commercial launch of the MT Cap in the
FastMT™ and SoftStart™ Software Enhancements to NeuroStar Therapy System
In October of 2021, the Company launched upgraded NeuroStar Advanced therapy systems with FastMT™ and SoftStart™, two significant software enhancements features related to a patient’s motor threshold assessment. FastMT™ and SoftStart™ enable faster motor threshold determination by reducing the number of steps in the process, allow health care professionals to automatically ramp pulse sequences to the prescribed treatment level for a patient, the ability to request and manage digital benefits investigation for new leads and the ability to schedule recurring patient outcome surveys through our TrakStar patient data management system.
In November of 2021 in
Credit Facility Amendment
In February of 2022, the Company announced it has amended its term loan agreement with its current lenders, investment affiliates managed by SLR Investment Corp. (SLR), which was originally entered into on
Business Outlook
For the full year 2022, the Company expects to report total worldwide revenue between
For the full year 2022, the Company expects total operating expenses to be between
For the first quarter of 2022, the Company expects to report 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 Neuronetics, Inc. (the “Company”) that are not historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as “outlook,” “potential,” “believe,” “expect,” “plan,” “anticipate,” “predict,” “may,” “will,” “could,” “would” and “should” as well as the negative of these terms and similar expressions. These statements include those relating to: the Company’s business outlook and current expectations for upcoming quarter and fiscal year 2022, including with respect to revenue, operating expense, growth, and any statements of assumptions underlying any of the foregoing items. These statements are subject to significant risks and uncertainties and actual results could differ materially from those projected. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this release. These risks and uncertainties include, without limitation, risks and uncertainties related to: the impact of COVID-19 on the Company’s operational and budget plans as well as general political and economic conditions, including as a result of efforts by governmental authorities to mitigate COVID-19, such as travel bans, shelter in place orders and third-party business closures and the related impact on resource allocations, manufacturing and supply chains and patient access to commercial products; the Company’s ability to execute its business continuity; the Company’s ability to achieve or sustain profitable operations due to its history of losses; the Company’s reliance on the sale and usage of its NeuroStar Advanced Therapy for
Investor Contact:
443-213-0499
ir@neuronetics.com
Media Contact:
EvolveMKD
646-517-4220
NeuroStar@evolvemkd.com
| NEURONETICS, INC. Statements of Operations (In thousands, except per share data) |
||||||||||||||||
| Three Months ended | Year ended | |||||||||||||||
| 2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Revenues | $ | 15,022 | $ | 15,579 | $ | 55,312 | $ | 49,244 | ||||||||
| Cost of revenues | 3,538 | 3,763 | 11,653 | 11,554 | ||||||||||||
| Gross Profit | 11,484 | 11,816 | 43,659 | 37,690 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 10,316 | 7,635 | 37,746 | 32,562 | ||||||||||||
| General and administrative | 6,333 | 4,729 | 25,554 | 18,236 | ||||||||||||
| Research and development | 1,743 | 2,112 | 7,923 | 9,201 | ||||||||||||
| Total operating expenses | 18,392 | 14,476 | 71,223 | 59,999 | ||||||||||||
| Loss from Operations | (6,908 | ) | (2,660 | ) | (27,564 | ) | (22,309 | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Interest expense | 1,064 | 1,011 | 4,019 | 4,522 | ||||||||||||
| Loss on extinguishment of debt | — | — | — | 924 | ||||||||||||
| Other income, net | (337 | ) | (14 | ) | (390 | ) | (302 | ) | ||||||||
| Net Loss | $ | (7,635 | ) | $ | (3,657 | ) | $ | (31,193 | ) | $ | (27,453 | ) | ||||
| Net loss per share of common stock outstanding, basic and diluted | $ | (0.29 | ) | $ | (0.19 | ) | $ | (1.22 | ) | $ | (1.46 | ) | ||||
| Weighted-average common shares outstanding, basic and diluted | 26,371 | 19,015 | 25,479 | 18,835 | ||||||||||||
| NEURONETICS, INC. Balance Sheets (In thousands, except per share data) |
||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 94,141 | $ | 48,957 | ||||
| Accounts receivable, net | 7,706 | 7,166 | ||||||
| Inventory | 6,563 | 3,720 | ||||||
| Current portion of net investments in sales-type leases | 2,198 | 1,887 | ||||||
| Current portion of prepaid commission expense | 1,559 | 1,096 | ||||||
| Current portion of note receivables | 74 | — | ||||||
| Prepaid expenses and other current assets | 3,090 | 2,186 | ||||||
| Total current assets | 115,331 | 65,012 | ||||||
| Property and equipment, net | 1,220 | 730 | ||||||
| Operating lease right-of-use assets | 3,884 | 3,418 | ||||||
| Net investments in sales-type leases | 1,697 | 2,331 | ||||||
| Prepaid commission expense | 6,763 | 5,300 | ||||||
| Long-term note receivables | 10,110 | — | ||||||
| Other assets | 2,218 | 1,866 | ||||||
| Total Assets | $ | 141,223 | $ | 78,657 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,299 | $ | 3,749 | ||||
| Accrued expenses | 8,233 | 7,319 | ||||||
| Deferred revenue | 2,501 | 2,020 | ||||||
| Current portion of operating lease liabilities | 670 | 594 | ||||||
| Current portion of long-term debt, net | — | — | ||||||
| Total current liabilities | 15,703 | 13,682 | ||||||
| Long-term debt, net | 35,335 | 34,620 | ||||||
| Deferred revenue | 1,471 | 1,741 | ||||||
| Operating lease liabilities | 3,539 | 3,121 | ||||||
| Total Liabilities | 56,048 | 53,164 | ||||||
| Commitments and contingencies | — | — | ||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, |
||||||||
| outstanding at |
— | — | ||||||
| Common stock, |
||||||||
| shares issued and outstanding at |
264 | 191 | ||||||
| Additional paid-in capital | 393,644 | 302,842 | ||||||
| Accumulated deficit | (308,733 | ) | (277,540 | ) | ||||
| Total Stockholders’ Equity | 85,175 | 25,493 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 141,223 | $ | 78,657 | ||||
| NEURONETICS, INC. Statements of Cash Flows (In thousands) |
||||||||
| Year ended |
||||||||
| 2021 | 2020 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (31,193 | ) | $ | (27,453 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 1,060 | 941 | ||||||
| Share-based compensation | 7,869 | 4,404 | ||||||
| Non-cash interest expense | 715 | 1,192 | ||||||
| Cost of rental units purchased by customers | 203 | 179 | ||||||
| Loss on extinguishment of debt | — | 622 | ||||||
| Changes in certain assets and liabilities: | ||||||||
| Accounts receivable, net | (3,054 | ) | (597 | ) | ||||
| Inventory | (3,444 | ) | (945 | ) | ||||
| Net investment in sales-type leases | 324 | (1,609 | ) | |||||
| Leasehold reimbursement | — | 836 | ||||||
| Prepaid commission expense | (1,926 | ) | (1,928 | ) | ||||
| Prepaid expenses and other assets | 62 | (641 | ) | |||||
| Accounts payable | 276 | (1,085 | ) | |||||
| Accrued expenses | 910 | (1,733 | ) | |||||
| Deferred revenue | 215 | (573 | ) | |||||
| (27,983 | ) | (28,390 | ) | |||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property and equipment and capitalized software | (2,353 | ) | (730 | ) | ||||
| Issuance of promissory note | (7,486 | ) | — | |||||
| (9,839 | ) | (730 | ) | |||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from issuance of long-term debt | — | 41,360 | ||||||
| Repayment of long-term debt | — | (38,860 | ) | |||||
| Payments of debt issuance costs | — | (821 | ) | |||||
| Proceeds from exercises of stock options | 2,435 | 690 | ||||||
| Payments of common stock offering issuance costs | (401 | ) | — | |||||
| Proceeds from the issuance of common stock | 80,972 | — | ||||||
| Net Cash Provided by Financing Activities | 83,006 | 2,369 | ||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | 45,184 | (26,751 | ) | |||||
| Cash and Cash Equivalents, Beginning of Period | 48,957 | 75,708 | ||||||
| Cash and Cash Equivalents, End of Period | $ | 94,141 | $ | 48,957 | ||||
Non-GAAP Financial Measures (Unaudited)
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 | Year ended | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| Net loss | $ | (7,635 | ) | $ | (3,657 | ) | $ | (31,193 | ) | $ | (27,453 | ) | ||||
| Interest expense | 1,064 | 1,011 | 4,019 | 4,522 | ||||||||||||
| Income taxes | — | — | — | — | ||||||||||||
| Depreciation and amortization | 292 | 200 | 1,060 | 941 | ||||||||||||
| EBITDA | $ | (6,279 | ) | $ | (2,446 | ) | $ | (26,114 | ) | $ | (21,990 | ) | ||||
Source: Neuronetics