Neuronetics Reports Record Fourth Quarter and Record Full Year 2023 Financial and Operating Results
Fourth Quarter 2023 Highlights
- Fourth quarter 2023 revenue of
$20.3 million , a 12% increase as compared to the fourth quarter 2022 U.S. NeuroStar Advanced Therapy system revenue of$4.5 million , in the quarter, the Company shipped 59 systems- Achieved record
U.S. treatment session revenue of$14.9 million in the fourth quarter 2023 - Local consumable treatment session revenue increased by over 33% versus the fourth quarter 2022
- The Company generated positive cash flow of approximately
$1.5 million in the fourth quarter 2023, ending 2023 with cash and cash equivalents at approximately$60 million
Full Year 2023 Highlights
- Full year 2023 revenue of
$71.3 million , a 9% increase as compared to full year 2022 - Full year 2023 U.S. treatment session revenue of
$50.9 million
Recent Operational and Marketing Highlights
- Launched first cohort within the “Better Me Guarantee Provider” pilot program in
January 2024 - Magellan,
BlueCross BlueShield of Kansas City ,Dean Health Plan , andLucet Health updated their healthcare policies, reducing the number of antidepressant medication attempts from four down to two prior to transcranial magnetic stimulation (TMS) treatment eligibility - Achieved milestone of over 169,000 global patients treated with 6.1 million treatment sessions
“We wrapped up an exciting 2023 with a strong fourth quarter. We continued to see improving utilization trends coming as a direct results of the many educational and training initiatives we have instituted over the past 18 months. Importantly, the utilization within our local consumable customers grew by over 20% in the quarter, and we saw improving performance at Greenbrook sites,” said
Fourth 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) | ||||||||||||
| $ | 19,872 | $ | 17,513 | 13 | % | |||||||
| International | 442 | 685 | (35 | ) | % | |||||||
| Total revenues | $ | 20,314 | $ | 18,198 | 12 | % | ||||||
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 | $ | 4,524 | $ | 4,616 | (2 | ) | % | |||||
| Treatment sessions | 14,878 | $ | 12,450 | 20 | % | |||||||
| Other | 470 | $ | 447 | 5 | % | |||||||
| Total |
$ | 19,872 | $ | 17,513 | 13 | % | ||||||
| U.S. NeuroStar Advanced Therapy System | ||||||||||||
| Revenues by Type | ||||||||||||
| Three Months Ended |
||||||||||||
| 2023 | 2022 | |||||||||||
| Amount | Amount | % Change | ||||||||||
| (in thousands, except percentages) | ||||||||||||
| NeuroStar capital | $ | 4,376 | $ | 4,371 | 0 | % | ||||||
| Operating lease | 38 | 43 | (12 | ) | % | |||||||
| Other | 110 | 202 | (46 | ) | % | |||||||
| Total |
$ | 4,524 | $ | 4,616 | (2 | ) | % | |||||
In the fourth quarter of 2023,
Gross margin for the fourth quarter of 2023 was 77.6%, an increase of approximately 170 basis points from the fourth quarter of 2022 gross margin of 75.9%.
Operating expenses during the fourth quarter of 2023 were
Net loss for the fourth quarter of 2023 was
EBITDA for the fourth quarter of 2023 was
In the fourth quarter, the Company achieved a significant milestone by generating positive cash flow for the first time in company history. The Company generated
Full year Financial and Operating Results
| Revenues by Geography | ||||||||||||
| Year ended |
||||||||||||
| 2023 | 2022 | |||||||||||
| Amount | Amount | % Change | ||||||||||
| (in thousands, except percentages) | ||||||||||||
| $ | 69,336 | $ | 63,406 | 9 | % | |||||||
| International | 2,012 | 1,800 | 12 | % | ||||||||
| Total revenues | $ | 71,348 | $ | 65,206 | 9 | % | ||||||
Total revenue increased by
| U.S. Revenues by Product Category | ||||||||||||
| Year ended |
||||||||||||
| 2023 | 2022 | |||||||||||
| Amount | Amount | % Change | ||||||||||
| (in thousands, except percentages) | ||||||||||||
| NeuroStar Advanced Therapy System | $ | 16,460 | $ | 16,575 | (1 | ) | % | |||||
| Treatment sessions | 50,896 | 45,077 | 13 | % | ||||||||
| Other | 1,980 | 1,754 | 13 | % | ||||||||
| Total |
$ | 69,336 | $ | 63,406 | 9 | % | ||||||
| U.S. NeuroStar Advanced Therapy System | ||||||||||||
| Revenues by Type | ||||||||||||
| Year ended |
||||||||||||
| 2023 | 2022 | |||||||||||
| Amount | Amount | % Change | ||||||||||
| (in thousands, except percentages) | ||||||||||||
| NeuroStar capital | $ | 15,805 | $ | 15,792 | 0 | % | ||||||
| Operating lease | 162 | $ | 222 | (27 | ) | % | ||||||
| Other | 493 | $ | 561 | (12 | ) | % | ||||||
| Total |
$ | 16,460 | $ | 16,575 | (1 | ) | % | |||||
Gross margin for the full year 2023 were 72.5%, a decrease of approximately 380 basis points from the full year 2022 gross margin of 76.3%. The decline in gross margin was driven by a
Operating expenses during the full year 2023 was
Net loss for the full year 2023 was
EBITDA for the full year 2023 was
Cash and cash equivalent were
Launched First Cohort of Customers within the Better Me Guarantee Provider Pilot Program
Following its pilot launch during late 2023, the Company launched its first official pilot cohort within the The Better Me Guarantee Provider program (BMGP), which consisted of approximately 100 customer sites in January of 2024. The BMGP program creates a nationwide network of accounts, that are committed to meeting certain standards of patient care and responsiveness developed in collaboration with medical experts. Regardless of practice size or tenure, this program aims to address reported responsiveness issues and lack of knowledge of transcranial magnetic stimulation (“TMS”) therapy that have negatively impacted patient access to quality care. Participating providers agree to attend
Healthcare Policy Updates
Between
Business Outlook
For the first quarter of 2024, the Company expects total worldwide revenue between
For the full year 2024, the Company expects total worldwide revenue to be between
For the full year 2024, the Company expects total operating expenses to be 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/7cha7jae. 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.
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; 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 | Year ended | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | 20,314 | $ | 18,198 | $ | 71,348 | $ | 65,206 | ||||||||
| Cost of revenues | 4,543 | 4,389 | 19,643 | 15,483 | ||||||||||||
| Gross Profit | 15,771 | 13,809 | 51,705 | 49,723 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 11,716 | 12,005 | 47,318 | 49,982 | ||||||||||||
| General and administrative | 6,276 | 6,391 | 25,426 | 25,516 | ||||||||||||
| Research and development | 2,206 | 3,139 | 9,515 | 9,336 | ||||||||||||
| Total operating expenses | 20,198 | 21,535 | 82,259 | 84,834 | ||||||||||||
| Loss from Operations | (4,427 | ) | (7,726 | ) | (30,554 | ) | (35,111 | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Interest expense | 1,843 | 1,212 | 5,424 | 4,251 | ||||||||||||
| Other income, net | (893 | ) | (649 | ) | (5,789 | ) | (2,203 | ) | ||||||||
| Net Loss | $ | (5,377 | ) | $ | (8,289 | ) | $ | (30,189 | ) | $ | (37,159 | ) | ||||
| Net loss per share of common stock outstanding, basic and diluted | $ | (0.19 | ) | $ | (0.30 | ) | $ | (1.05 | ) | $ | (1.38 | ) | ||||
| Weighted-average common shares outstanding, basic and diluted | 29,048 | 27,207 | 28,658 | 26,900 | ||||||||||||
| NEURONETICS, INC. Balance Sheets (In thousands, except per share data) |
||||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 59,677 | $ | 70,340 | ||||
| Accounts receivable, net | 15,782 | 13,591 | ||||||
| Inventory | 8,093 | 8,899 | ||||||
| Current portion of net investments in sales-type leases | 905 | 1,538 | ||||||
| Current portion of prepaid commission expense | 2,514 | 1,997 | ||||||
| Current portion of note receivables | 2,056 | 230 | ||||||
| Prepaid expenses and other current assets | 4,766 | 2,174 | ||||||
| Total current assets | 93,793 | 98,769 | ||||||
| Property and equipment, net | 2,009 | 1,991 | ||||||
| Operating lease right-of-use assets | 2,773 | 3,327 | ||||||
| Net investments in sales-type leases | 661 | 1,222 | ||||||
| Prepaid commission expense | 8,370 | 7,568 | ||||||
| Long-term notes receivable | 3,795 | 362 | ||||||
| Other assets | 4,430 | 3,645 | ||||||
| Total assets | $ | 115,831 | $ | 116,884 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,752 | $ | 2,433 | ||||
| Accrued expenses | 12,595 | 14,837 | ||||||
| Deferred revenue | 1,620 | 1,980 | ||||||
| Current portion of operating lease liabilities | 845 | 824 | ||||||
| Current portion of long-term debt, net | — | 13,125 | ||||||
| Total current liabilities | 19,812 | 33,199 | ||||||
| Long-term debt, net | 59,283 | 22,829 | ||||||
| Deferred revenue | 200 | 829 | ||||||
| Operating lease liabilities | 2,346 | 2,967 | ||||||
| Total liabilities | 81,641 | 59,824 | ||||||
| Commitments and contingencies (Note 17) | — | — | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, |
— | — | ||||||
| Common stock, |
291 | 273 | ||||||
| Additional paid-in capital | 409,980 | 402,679 | ||||||
| Accumulated deficit | (376,081 | ) | (345,892 | ) | ||||
| Total Stockholders’ equity | 34,190 | 57,060 | ||||||
| Total liabilities and Stockholders’ equity | $ | 115,831 | $ | 116,884 | ||||
| NEURONETICS, INC. Statements of Cash Flows (In thousands) |
||||||||
| Year ended |
||||||||
| 2023 | 2022 | |||||||
| Cash flows from Operating activities: | ||||||||
| Net loss | $ | (30,189 | ) | $ | (37,159 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 2,006 | 1,648 | ||||||
| Allowance for credit losses | 390 | 341 | ||||||
| Inventory impairment | 1,905 | — | ||||||
| Share-based compensation | 7,319 | 8,746 | ||||||
| Non-cash interest expense | 634 | 709 | ||||||
| Cost of rental units purchased by customers | — | 92 | ||||||
| Changes in certain assets and liabilities: | ||||||||
| Accounts receivable, net | (8,831 | ) | (6,658 | ) | ||||
| Inventory | (1,098 | ) | (2,587 | ) | ||||
| Net investment in sales-type leases | 1,193 | 1,114 | ||||||
| Prepaid commission expense | (1,319 | ) | (1,243 | ) | ||||
| Prepaid expenses and other assets | (2,845 | ) | 786 | |||||
| Accounts payable | 2,029 | (1,968 | ) | |||||
| Accrued expenses | (2,243 | ) | 6,604 | |||||
| Deferred revenue | (989 | ) | (1,164 | ) | ||||
| Net Cash Used in Operating Activities | (32,038 | ) | (30,739 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property and equipment and capitalized software | (2,369 | ) | (3,269 | ) | ||||
| Repayment of notes receivable | 1,047 | 10,000 | ||||||
| Net Cash (Used in) Provided by Investing Activities | (1,322 | ) | 6,731 | |||||
| Cash Flows from Financing Activities: | ||||||||
| Payments of debt issuance costs | (1,104 | ) | (91 | ) | ||||
| Proceeds from issuance of long-term debt | 25,000 | — | ||||||
| Repayment of long-term debt | (1,200 | ) | — | |||||
| Proceeds from exercises of stock options | 1 | 298 | ||||||
| Net Cash Provided by (Used in) Financing Activities | 22,697 | 207 | ||||||
| Net Decrease in Cash and Cash Equivalents | (10,663 | ) | (23,801 | ) | ||||
| Cash and Cash Equivalents, Beginning of Period | 70,340 | 94,141 | ||||||
| Cash and Cash Equivalents, End of Period | $ | 59,677 | $ | 70,340 | ||||
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 | Year ended | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| Net loss | $ | (5,377 | ) | $ | (8,289 | ) | $ | (30,189 | ) | $ | (37,159 | ) | ||||
| Interest expense | 1,843 | 1,212 | 5,424 | 4,251 | ||||||||||||
| Income taxes | — | — | — | — | ||||||||||||
| Depreciation and amortization | 503 | 604 | 2,006 | 1,648 | ||||||||||||
| EBITDA | $ | (3,031 | ) | $ | (6,473 | ) | $ | (22,759 | ) | $ | (31,260 | ) | ||||
Source: Neuronetics