Neuronetics Reports Record First Quarter 2023 Financial and Operating Results
First Quarter 2023 Highlights
- First quarter 2023 revenue of
$15.5 million , an increase of 10% over the first quarter of 2022 U.S. treatment session revenue increased 12% over the first quarter of 2022- Shipped 49 systems continuing our capital expansion strategy
Recent Operational Highlights
- Strengthened our balance sheet by amending our senior secured credit facility with
SLR Capital Partners that provides for borrowings of up to$60 million United HealthCare updated its Medicare Advantage policy in states covered byNational Government Services (“NGS”) Medicare to allow non-physician practitioners (“NPPs”) to prescribe transcranial magnetic stimulation (“TMS”)BlueCross BlueShield of Mississippi updated its healthcare policy to allow NPPs to prescribe TMS- Fifth
U.S Food and Drug Administration (“FDA”) clearance in less than two years offers enhanced Wi-Fi capabilities for NeuroStar Advanced Therapy
Recent Marketing Highlights
- Achieved milestones of over 150,000 global patients treated with 5.5 million of our treatment sessions, another Company record
“We are pleased to report a strong start to the year with our first -quarter performance reflecting the positive impacts of our ability to execute on our strategic initiatives. In addition to the strength seen across both our NeuroStar system expansion and the very encouraging trends in treatment sessions, we continue to see improved access to our technology through healthcare policy updates and enhanced connectivity capabilities for NeuroStar Advanced Therapy. This is a testament to the effectiveness of our technology and the dedication of our team,” said
First Quarter 2023 Financial and Operating Results for the Three Months Ended
Revenues by Geography | ||||||||
Three Months Ended |
||||||||
2023 | 2022 | |||||||
Amount | Amount | % Change | ||||||
(in thousands, except percentages) | ||||||||
$ | 14,964 | $ | 13,517 | 11 | % | |||
International | 576 | 664 | (13 | )% | ||||
Total revenues | $ | 15,540 | $ | 14,181 | 10 | % | ||
Total revenue for the three months ended
U.S. Revenues by Product Category | ||||||||
Three Months Ended |
||||||||
2023 | 2022 | |||||||
Amount | Amount | % Change | ||||||
(in thousands, except percentages) | ||||||||
NeuroStar Advanced Therapy system | $ | 3,850 | $ | 3,642 | 6 | % | ||
Treatment sessions | 10,643 | $ | 9,469 | 12 | % | |||
Other | 471 | $ | 406 | 16 | % | |||
Total |
$ | 14,964 | $ | 13,517 | 11 | % |
U.S. NeuroStar Advanced Therapy System | ||||||||
Revenues by Type | ||||||||
Three Months Ended |
||||||||
2023 | 2022 | |||||||
Amount | Amount | % Change | ||||||
(in thousands, except percentages) | ||||||||
NeuroStar capital | $ | 3,649 | $ | 3,485 | 5 | % | ||
Operating lease | 39 | 67 | (42 | )% | ||||
Other | 162 | 90 | 80 | % | ||||
Total |
$ | 3,850 | $ | 3,642 | 6 | % | ||
In the first quarter of 2023,
Gross margin for the first quarter of 2023 was 73.3%, a decrease of approximately 210 basis points from the first quarter of 2022 gross margin of 75.4%. The decline in gross margin was driven by revenue mix, as well as an increase in capitalized software and the corresponding amortization expense associated with the latest product release.
Operating expenses during the first quarter of 2023 were
Net loss for the first quarter of 2023 was
EBITDA for the first quarter of 2023 was
Cash and cash equivalents were
Secures Up To
United Health Care Medicare Advantage Plans in NGS States Expand Access via NPPs
BlueCross BlueShield (BCBS) of
FDA Clears Enhanced Wi-Fi Capabilities for NeuroStar Advanced Therapy
Neuronetic’s fifth FDA clearance in less than two years offers greater flexibility to improve the patient and provider experience. The new Wi-Fi capability offers improved internet connectivity for NeuroStar providers with restricted networks. This advancement allows for greater flexibility in the NeuroStar system placement and access to more connectivity options for TrakStar, while maintaining Health Insurance Portability and Accountability Act compliance and patient security. The improved internet connectivity feature also grants NeuroStar providers access to all the features and benefits exclusive to TrakStar cloud customers. This advancement also allows for improved access to TrakStar insights.
Business Outlook
For the full year 2023, the Company now expects total worldwide revenue to be between
For the full year 2023, the Company continues to expect total operating expenses to be between
For the second quarter of 2023, the Company expects total worldwide revenue between
Webcast and Conference Call Information
Neuronetics’ management team will host a conference call on
The conference call will be broadcast live in listen-only mode via webcast at https://edge.media-server.com/mmc/p/dkh33hi3. To listen to the conference call on your telephone, participants may register for the call here. While it is not required, it is recommended you join 10 minutes prior to the event start. To access the live audio webcast or subsequent archived recording, visit the Investor Relations section of Neuronetics’ website at ir.neuronetics.com.
About
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:
Statements in the press release regarding 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 quarters and fiscal year 2023, including with respect to revenue, expenses, 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 public health crises on the Company’s operations, manufacturing and supply chain interruptions or delays; the Company’s ability to execute its business strategy; the Company’s ability to achieve or sustain profitable operations due to its history of losses; the Company’s reliance on the sale and use of its NeuroStar Advanced Therapy system to generate revenues; the scale and efficacy of the Company’s salesforce; the Company’s ability to retain talent; availability of coverage and reimbursement from third-party payors for treatments using the Company’s products; physician and patient demand for treatments using the Company’s products; developments in competing technologies and therapies for the indications that the Company’s products treat; product defects; the Company’s ability to obtain and maintain intellectual property protection for its technology; developments in clinical trials or regulatory review of NeuroStar Advanced Therapy system for additional indications; and developments in regulation in the
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 | |||||||
2023 | 2022 | ||||||
Revenues | $ | 15,540 | $ | 14,181 | |||
Cost of revenues | 4,144 | 3,485 | |||||
Gross Profit | 11,396 | 10,696 | |||||
Operating expenses: | |||||||
Sales and marketing | 11,902 | 12,649 | |||||
General and administrative | 6,611 | 6,379 | |||||
Research and development | 2,790 | 1,803 | |||||
Total operating expenses | 21,303 | 20,831 | |||||
Loss from Operations | (9,907 | ) | (10,135 | ) | |||
Other (income) expense: | |||||||
Interest expense | 1,253 | 978 | |||||
Other income, net | (640 | ) | (275 | ) | |||
Net Loss | $ | (10,520 | ) | $ | (10,838 | ) | |
Net loss per share of common stock outstanding, basic and diluted | $ | (0.38 | ) | $ | (0.41 | ) | |
Weighted-average common shares outstanding, basic and diluted | 28,034 | 26,597 | |||||
NEURONETICS, INC. | |||||||
Balance Sheets | |||||||
(In thousands, except per share data) | |||||||
2023 | 2022 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 55,443 | $ | 70,340 | |||
Accounts receivable, net | 9,452 | 13,591 | |||||
Inventory | 9,142 | 8,899 | |||||
Current portion of net investments in sales-type leases | 1,257 | 1,538 | |||||
Current portion of prepaid commission expense | 2,097 | 1,997 | |||||
Current portion of note receivables | 1,498 | 230 | |||||
Prepaid expenses and other current assets | 2,218 | 2,174 | |||||
Total current assets | 81,107 | 98,769 | |||||
Property and equipment, net | 1,990 | 1,991 | |||||
Operating lease right-of-use assets | 3,193 | 3,327 | |||||
Net investments in sales-type leases | 989 | 1,222 | |||||
Prepaid commission expense | 7,643 | 7,568 | |||||
Long-term note receivable | 5,189 | 362 | |||||
Other assets | 3,493 | 3,645 | |||||
Total Assets | $ | 103,604 | $ | 116,884 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,970 | $ | 2,433 | |||
Accrued expenses | 7,440 | 14,837 | |||||
Deferred revenue | 1,891 | 1,980 | |||||
Current portion of operating lease liabilities | 829 | 824 | |||||
Current portion of long-term debt, net | — | 13,125 | |||||
Total current liabilities | 15,130 | 33,199 | |||||
Long-term debt, net | 36,641 | 22,829 | |||||
Deferred revenue | 671 | 829 | |||||
Operating lease liabilities | 2,817 | 2,967 | |||||
Total Liabilities | 55,259 | 59,824 | |||||
Commitments and contingencies (Note 17) | — | — | |||||
Stockholders’ Equity: | |||||||
Preferred stock, |
— | — | |||||
Common stock, |
285 | 273 | |||||
Additional paid-in capital | 404,472 | 402,679 | |||||
Accumulated deficit | (356,412 | ) | (345,892 | ) | |||
Total Stockholders’ Equity | 48,345 | 57,060 | |||||
Total Liabilities and Stockholders’ Equity | $ | 103,604 | $ | 116,884 | |||
NEURONETICS, INC. | |||||||
Statements of Cash Flows | |||||||
(In thousands) | |||||||
Three months ended |
|||||||
2023 | 2022 | ||||||
Cash Flows from Operating Activities: | |||||||
Net loss | $ | (10,520 | ) | $ | (10,838 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 516 | 319 | |||||
Share-based compensation | 1,805 | 2,252 | |||||
Non-cash interest expense | 188 | 164 | |||||
Changes in certain assets and liabilities: | |||||||
Accounts receivable, net | (2,007) | (545 | ) | ||||
Inventory | (243 | ) | (1,021 | ) | |||
Net investment in sales-type leases | 535 | 389 | |||||
Prepaid commission expense | (175 | ) | (295 | ) | |||
Prepaid expenses and other assets | 131 | 801 | |||||
Accounts payable | 2,484 | (2,226 | ) | ||||
Accrued expenses | (7,680 | ) | (447 | ) | |||
Deferred revenue | (247 | ) | (735 | ) | |||
(15,213 | ) | (12,182 | ) | ||||
Cash Flows from Investing Activities: | |||||||
Purchases of property and equipment and capitalized software | (234 | ) | (1,074 | ) | |||
Repayment of notes receivable | 51 | — | |||||
(183 | ) | (1,074 | ) | ||||
Cash Flows from Financing Activities: | |||||||
Payments of debt issuance costs | (801 | ) | (57 | ) | |||
Proceeds from issuance of long-term debt | 2,500 | — | |||||
Repayment of long-term debt | (1,200 | ) | — | ||||
Proceeds from exercises of stock options | — | 9 | |||||
Net Cash Provided by (Used in) Financing Activities | 499 | (48 | ) | ||||
Net Decrease in Cash and Cash Equivalents | (14,897 | ) | (13,304 | ) | |||
Cash and Cash Equivalents, Beginning of Period | 70,340 | 94,141 | |||||
Cash and Cash Equivalents, End of Period | $ | 55,443 | $ | 80,837 | |||
Non-GAAP Financial Measures (Unaudited)
EBITDA is not a measure of financial performance under generally accepted accounting principles in the U.S. (“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, because 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 | |||||||
2023 | 2022 | ||||||
(in thousands) | |||||||
Net loss | $ | (10,520 | ) | $ | (10,838 | ) | |
Interest expense | 1,253 | 978 | |||||
Income taxes | — | — | |||||
Depreciation and amortization | 516 | 319 | |||||
EBITDA | $ | (8,751 | ) | $ | (9,541 | ) |
Source: Neuronetics