Cesca Therapeutics Announces Fiscal Year 2017 Financial and Operating Results and Provides Corporate Update
September 19 2017 - 4:05PM
Cesca Therapeutics Inc. (NASDAQ:KOOL), a market leader in automated
cell processing and point-of-care, autologous cell-based therapies,
today announced financial and operating results for the fiscal year
ended June 30, 2017 and provided a corporate update.
Fiscal Fourth Quarter and Recent
Highlights
- Acquired the cell processing systems of SynGen under an asset
acquisition agreement, significantly enhancing the company’s CAR-T
cell manufacturing capabilities
- Announced the addition of Phil Coelho, co-founder and chief
technology officer of SynGen, as chief technology officer of
ThermoGenesis Corp., Cesca’s device subsidiary
- Announced the issuance of a new patent covering next-generation
automated technology for isolating and harvesting rare cell types
with superior purity, recovery and viability
- Signed a new international distribution agreement with Boyalife
WSN Ltd. covering China, India, Singapore, the Philippines and
Indonesia
- Increased revolving line of credit with Boyalife Investment
Fund II, Inc., a wholly-owned subsidiary of Boyalife Group Inc., to
$10 million
- Added to the Russell Microcap® Index, effective June 26,
2017
- Company to convert to a December 31 fiscal year-end and plans
to issue a Transitional Form 10-K for the six months ended December
31, 2017
“Since our fiscal third quarter update, we
continued to vigorously pursue a new strategic direction for our
company as we transform into a leading global provider of automated
technologies for cellular processing, cellular biobanking and
point-of-care cell-based therapeutics,” said Dr. Chris Xu, chief
executive officer of Cesca. “In particular, the acquisition of the
cellular processing assets from SynGen significantly strengthened
our capabilities in the burgeoning CAR-T field, positioning Cesca
as the partner of choice for companies seeking a co-development
collaborator, or looking for an automated solution to ease the
bottleneck caused by lengthy CAR-T cell manufacturing times. During
the period, we also leveraged our affiliation with Boyalife Group
by signing a distribution agreement with Boyalife WSN Ltd. This
agreement gives us access to several of the world’s fastest growing
economies, including India and, most notably, China, where a
substantial number of CAR-T clinical trials are currently
underway.”
Financial Results for the Full Year
Ended June 30, 2017
Net revenue. Net revenues for
the twelve months ended June 30, 2017 was $14.5 million compared to
$11.9 million for the twelve months ended June 30, 2016. The
increase in revenues was primarily a result of increased shipments
of AXP disposables to a single end-user customer and distributors
in China and Europe, as well as a higher number of BioArchive
shipments versus 2016.
Gross profit. Gross profit for
the twelve months ended June 30, 2017 was $5.8 million, or 40% of
net revenue, compared to $2.7 million, or 23% of net revenue for
fiscal 2016. The increase in gross profit margin was primarily due
to higher average sales prices on product mix and a reduction in
overhead costs during the year ended June 30, 2017.
Sales and marketing expenses.
Sales and marketing expenses for the twelve months ended June 30,
2017 decreased $617,000, or 29%, to $1.5 million, compared to $2.1
million for the twelve months ended 2016. The reduction was
primarily due to lower personnel costs resulting from the Company’s
September 2016 Sales reorganization.
Research and development
expenses. Research and development expenses for the twelve
months ended June 30, 2017 were $2.5 million, compared to $3.2
million for fiscal 2016. The full-year decrease was primarily due
to lower personnel costs coupled with a reduction in rent expense
associated with the consolidation of the company’s U.S. operations
into its Rancho Cordova facility.
General and administrative
expenses. General and administrative expenses for the
twelve months ended June 30, 2017 were $11.0 million compared to
$8.2 million for fiscal 2016. The increase as compared to 2016 is
the result of higher legal fees as well as severance and related
costs.
Net loss. For the twelve months
ended June 30, 2017, the company reported a net loss of $29.1
million, or ($3.27) per share, based on 8.9 million weighted
average common shares outstanding. This compares to a net loss of
$18.6 million, or ($7.57) per share, based on 2.5 million weighted
average common shares outstanding for the full fiscal year
2016.
Adjusted EBITDA. In addition to the results
reported in accordance with U.S. GAAP, Cesca also uses a non-GAAP
measure, adjusted EBITDA, to evaluate operating performance and to
facilitate comparisons with historical results and trends. For the
full fiscal year 2017, Cesca reported an adjusted EBITDA loss of
$6.6 million compared to $9.0 million for fiscal 2016. The
reduction in the adjusted EBITDA loss was due primarily to higher
revenue and resulting higher gross profit margin.
Conference Call and Webcast
InformationCesca will host a conference call and audio
webcast today at 4:30 p.m. EDT (1:30 p.m. PDT). Participants may
access the call by dialing 1-800-860-2442 within the U.S. or
1-412-858-4600 outside the U.S. and referencing “Cesca.” To access
a live webcast of the call, please
visit:http://services.choruscall.com/links/kool170919.html. A
replay of the call can be accessed approximately one hour after
completion of the call and will be available until October 19,
2017. To listen to the replay, dial 1-877-344-7529 within the U.S.
or 1-412-317-0088 outside the U.S. and reference access code
10111466.
About Cesca Therapeutics Inc.Cesca is a leading
regenerative medicine company that develops, commercializes and
markets a range of automated technologies for cell-based
therapeutics. Its device division, ThermoGenesis, provides a full
suite of solutions for automated clinical biobanking, point-of-care
applications, and automation for immuno-oncology. Cesca is also
leveraging its proprietary AutoXpress® technology platform to
develop autologous stem cell-based therapies that address
significant unmet needs in the vascular, cardiology and orthopedic
markets.
Forward-Looking StatementThe statements
contained herein may include statements of future expectations and
other forward-looking statements that are based on management’s
current views and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in such
statements. A more complete description of risks that could cause
actual events to differ from the outcomes predicted by Cesca
Therapeutics’ forward-looking statements is set forth under the
caption "Risk Factors" in Cesca Therapeutics’ annual report on Form
10-K and other reports it files with the Securities and Exchange
Commission from time to time, and you should consider each of those
factors when evaluating the forward-looking statements.
Company Contact: Cesca Therapeutics Inc. Wendy
Samford916-858-5191ir@cescatherapeutics.com
Investor Contact: Rx CommunicationsPaula
Schwartz917-322-2216pschwartz@rxir.com
Financials
Cesca Therapeutics Inc. |
Consolidated Balance Sheets |
(Unaudited) |
|
|
(in thousands) |
|
June 30, 2017 |
|
June 30, 2016 |
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
3,623 |
|
$ |
5,835 |
|
|
Accounts
receivable, net |
|
|
3,701 |
|
|
3,169 |
|
|
Inventories |
|
|
3,617 |
|
|
3,593 |
|
|
Prepaid
expenses and other current assets |
|
|
237 |
|
|
246 |
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
11,178 |
|
|
12,843 |
|
|
|
|
|
|
|
|
|
Equipment, net |
|
|
2,330 |
|
|
2,962 |
|
|
Goodwill |
|
|
13,195 |
|
|
13,195 |
|
|
Intangible assets,
net |
|
|
20,165 |
|
|
20,821 |
|
|
Other assets |
|
|
64 |
|
|
78 |
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
46,932 |
|
$ |
49,899 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
1,601 |
|
$ |
2,648 |
|
|
Other
current liabilities |
|
|
2,919 |
|
|
2,894 |
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
4,520 |
|
|
5,542 |
|
|
|
|
|
|
|
|
|
Long-term
liabilities |
|
|
11,575 |
|
|
12,084 |
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
30,837 |
|
|
32,273 |
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
|
$ |
46,932 |
|
$ |
49,899 |
|
Cesca Therapeutics Inc. |
Consolidated Statements of
Operations |
(Unaudited) |
|
(in
thousands) |
Year Ended June 30, |
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
Net revenues |
|
$ |
14,525 |
|
|
$ |
11,929 |
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
8,686 |
|
|
|
9,185 |
|
|
|
|
|
|
|
|
Gross
profit |
|
|
5,839 |
|
|
|
2,744 |
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
|
1,531 |
|
|
|
2,148 |
|
|
|
|
|
|
|
|
Research
and development |
|
|
2,497 |
|
|
|
3,230 |
|
|
|
|
|
|
|
|
General
and administrative |
|
|
11,051 |
|
|
|
8,231 |
|
|
|
|
|
|
|
|
Total
operating expenses |
|
|
15,079 |
|
|
|
13,609 |
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(9,240 |
) |
|
|
(10,865 |
) |
|
|
|
|
|
|
|
Amortization of debt
discount |
|
|
(9,851 |
) |
|
|
(6,127 |
) |
|
Fair value change of
derivative instruments |
|
|
(60 |
) |
|
|
3,395 |
|
|
Registration rights
liquidated damages |
|
|
-- |
|
|
|
(1,100 |
) |
|
Loss on cashless
exercise of warrants |
|
|
-- |
|
|
|
(1,039 |
) |
|
Loss on extinguishment
of debt |
|
|
-- |
|
|
|
(795 |
) |
|
Loss on modification of
Series A warrants |
|
|
-- |
|
|
|
(149 |
) |
|
Interest and other |
|
|
(10,617 |
) |
|
|
(1,908 |
) |
|
Total other
income/(expense) |
|
|
(20,528 |
) |
|
|
(7,723 |
) |
|
|
|
|
|
|
|
Loss before benefit for
income taxes |
|
|
(29,768 |
) |
|
|
(18,588 |
) |
|
Benefit for income
taxes |
|
|
673 |
|
|
|
-- |
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(29,095 |
) |
|
$ |
(18,588 |
) |
|
Cesca Therapeutics Inc. |
Consolidated Statements of Cash
Flows |
(Unaudited) |
|
(in thousands) |
Years EndedJune 30, |
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
Net cash
used in operating activities |
($7,215 |
) |
|
($9,625 |
) |
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital
expenditures |
|
(375 |
) |
|
|
(710 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Gross
proceeds from convertible debentures |
|
-- |
|
|
|
18,000 |
|
Proceeds
from long term debt-related party |
|
3,500 |
|
|
|
-- |
|
Payment
of financing cost-convertible debentures |
|
-- |
|
|
|
(961 |
) |
Repayment
of convertible debentures |
|
-- |
|
|
|
(6,444 |
) |
Payment
to extinguish derivative obligations |
|
-- |
|
|
|
(159 |
) |
Payments
on capital lease obligations |
|
(84 |
) |
|
|
(67 |
) |
Proceeds
from issuance of common stock, net |
|
2,092 |
|
|
|
2,463 |
|
Repurchase of common stock |
|
(134 |
) |
|
|
(8 |
) |
|
|
|
|
Net cash
provided by (used in) financing activities |
|
5,374 |
|
|
|
12,824 |
|
|
|
|
|
Effects of foreign
currency rate changes on cash and cash equivalents |
|
4 |
|
|
|
(11 |
) |
Net increase (decrease)
in cash and cash equivalents |
|
(2,212 |
) |
|
|
2,478 |
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
5,835 |
|
|
|
3,357 |
|
Cash and cash
equivalents at end of period |
$3,623 |
|
|
$5,835 |
|
Cesca Therapeutics Inc. |
Adjusted EBITDA |
(Unaudited) |
|
|
(in
thousands) |
|
|
Year Ended June 30, |
|
|
|
|
2017 |
|
2016 |
|
Loss from
operations |
|
|
($ |
9,240 |
) |
|
($ |
10,865 |
) |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
830 |
|
|
|
1,168 |
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
|
1,461 |
|
|
|
742 |
|
|
|
|
|
|
|
|
|
Impairment of intangible asset |
|
|
|
310 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
loss |
|
|
($ |
6,639 |
) |
|
($ |
8,955 |
) |
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