Avinger, Inc. (Nasdaq: AVGR), a commercial-stage medical device
company marketing the first and only intravascular image-guided,
catheter-based system for diagnosis and treatment of patients with
Peripheral Artery Disease (PAD), today reported results for the
quarter ended September 30, 2019.
Third Quarter Highlights
- Increased revenue 19% year-over-year, to $2.4 million, driven
by a 33% increase in catheter sales and launches at 7 new
sites
- Grew total Pantheris revenue by 81%, to $1.6 million, compared
to prior year and 48% compared to the second quarter
- Commenced national launch of Pantheris SV (Small Vessel) in
late September with strong market demand
- Reported 35% gross margin, an 8-point improvement from prior
year, and a 4-point increase over the second quarter
- Further reduced operating expenses by 7% year-over-year
Jeff Soinski, Avinger’s president and CEO, commented, “Avinger
demonstrated clear acceleration in its topline performance with a
33% increase in catheter sales and a 19% increase in overall
revenue during the third quarter. Revenue growth was driven by
broad-based increases in Pantheris utilization, new Lumivascular
site launches and the addition of Pantheris SV to our portfolio
late in the quarter. We expect these actions to drive continued
growth of catheter sales in the fourth quarter.
“Operational results also continued to improve as we scale
revenue. Gross margin increased to 35% and operating expenses
continued to decline as we closely manage costs. Our expanded sales
team has been successful at driving case volume across our
installed base and enabled the launch of 7 new sites in the third
quarter, including centers located in the high-volume PAD markets
of Florida, Georgia and Arizona. We expect to further ramp
treatment volume at current accounts and to add new sites in the
fourth quarter.
“We are especially excited about the launch of Pantheris SV,
which has generated strong sales activity from the first day of its
national launch in late September. Centers are actively seeking
this compelling new solution to treat disease in small vessels,
where few good therapeutic options exist. With 25 sites utilizing
SV product in the third quarter and new sites coming online each
week, we are seeing strong early momentum. By extending physicians’
reach to the small vessels below-the-knee, we estimate Pantheris SV
could expand our addressable atherectomy market by as much as
50%.”
Third Quarter 2019 Financial ResultsTotal
revenue was $2.4 million for the third quarter of 2019, an increase
of 19% from the third quarter of 2018, driven by a 33%
year-over-year increase in catheter sales. Revenue growth was
offset by a decline in console sales, which were a larger
contributor to revenue in 2018. The company is focusing on
expanding its sales of disposable products, which can generate
higher margin at scale.
Gross margin for the third quarter of 2019 was 35%, an 8-point
increase compared to the third quarter of 2018 and a 4-point
sequential increase compared to the second quarter of 2019.
The gross margin improvement was driven by increased sales of
higher margin products and expanded production output. Operating
expenses for the third quarter of 2019 were $5.5 million, a
decrease of 7% from the third quarter of 2018, even as the company
has ramped its sales team throughout 2019, from 20 a year-ago to 28
sales professionals at the end of the third quarter.
Net loss and comprehensive loss for the third quarter of 2019
was $4.6 million, an improvement of 14% compared to a loss of $5.4
million in the third quarter of 2018.
Adjusted EBITDA, as defined under non-GAAP measures in this
press release, was a loss of $3.9 million, an improvement of 12%
compared to a loss of $4.4 million for the third quarter of 2018.
This was Avinger’s third consecutive quarter in reduction of
adjusted EBITDA loss and its lowest adjusted EBITDA loss in 3
years.
For more information regarding non-GAAP financial measures
discussed in this press release, please see “Non-GAAP Financial
Measures” below, as well as the reconciliation of GAAP to non-GAAP
measures provided in the tables below.
Balance SheetCash and cash equivalents totaled
$14.5 million as of September 30, 2019, compared with $14.8 million
as of June 30, 2019. On August 26, 2019, Avinger announced gross
proceeds of $4.5 million from an underwritten public offering.
As of September 30, 2019, Avinger had approximately 10.3 million
shares of common stock, 44,745 shares of Series A preferred stock
and 178 shares of Series B preferred stock outstanding. Each share
of the Series A preferred stock is convertible into 50 shares of
the Company’s common stock at a conversion price of $20.00 per
share. Each share of Series B preferred stock is convertible into
approximately 847 shares of the Company’s common stock at a
conversion price of $1.18.
Conference Call Avinger will hold a conference
call today, November 5, 2019 at 4:30pm ET to discuss its third
quarter 2019 financial results.
Individuals interested in listening to the conference call may
do so by dialing 844-369-8774 for domestic callers or
+1-862-298-0844 for international callers. To listen to a live
webcast, please visit http://www.avinger.com and select Investor
Relations.
A replay of the call will be available beginning November 5,
2019 at approximately 7:30pm PT/ 10:30pm ET through November 12,
2019. To access the replay, dial +1-919-882-2331 and reference
Conference ID: 56428. The webcast will also be available on
Avinger's website following completion of the call at
www.avinger.com.
About Avinger, Inc.Avinger is a
commercial-stage medical device company that designs and develops
the first and only image-guided, catheter-based system for the
diagnosis and treatment of patients with Peripheral Artery Disease
(PAD). PAD is estimated to affect over 12 million people in the
U.S. and over 200 million worldwide. Avinger is dedicated to
radically changing the way vascular disease is treated through its
Lumivascular platform, which currently consists of the Lightbox
imaging console, the Ocelot family of chronic total occlusion (CTO)
catheters, and the Pantheris® family of atherectomy devices.
Avinger is based in Redwood City, California. For more information,
please visit www.avinger.com.
Forward-Looking StatementsThis news release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include statements
regarding our future performance, including relating to our
expectations regarding further growth of disposable sales and
expected treatment volume, and the potential increase of our
available atherectomy market. Such statements are based on current
assumptions that involve risks and uncertainties that could cause
actual outcomes and results to differ materially. These risks and
uncertainties, many of which are beyond our control, include our
dependency on a limited number of products; our ability to
demonstrate the benefits of our Lumivascular platform; the resource
requirements related to Pantheris; the outcome of clinical trial
results; potential exposure to third-party product liability,
intellectual property and other litigation; lack of long-term data
demonstrating the safety and efficacy of our Lumivascular platform
products; experiences of high-volume users of our products may lead
to better patient outcomes than those of physicians that are less
proficient; reliance on third-party vendors; dependency on
physician adoption; reliance on key personnel; and requirements to
obtain regulatory approval to commercialize our products; as well
as the other risks described in the section entitled "Risk Factors"
and elsewhere in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 6, 2019. These
forward-looking statements speak only as of the date hereof and
should not be unduly relied upon. Avinger disclaims any obligation
to update these forward-looking statements.
Non-GAAP Financial
Measures Avinger has provided
in this press release financial information that has not been
prepared in accordance with generally accepted accounting
principles in the United States (GAAP). The Company uses these
non-GAAP financial measures internally in analyzing its financial
results and believes that the use of these non-GAAP financial
measures is useful to investors as an additional tool to evaluate
ongoing operating results and trends and in comparing the Company’s
financial results with other companies in its industry, many of
which present similar non-GAAP financial measures.
The presentation of these non-GAAP financial measures are not
meant to be considered in isolation or as a substitute for
comparable GAAP financial measures, and should be read only in
conjunction with the Company’s financial statements prepared in
accordance with GAAP. A reconciliation of the Company’s non-GAAP
financial measures to their most directly comparable GAAP measures
has been provided in the financial statement tables included in
this press release, and investors are encouraged to review these
reconciliations.
Adjusted EBITDA. Avinger defines Adjusted EBITDA as net loss and
comprehensive loss plus interest expense, net, plus other income,
net, plus stock-based compensation expense plus certain inventory
charges plus certain depreciation and amortization expense.
Investors are cautioned that there are a number of limitations
associated with the use of non-GAAP financial measures as
analytical tools. Furthermore, these non-GAAP financial measures
are not based on any standardized methodology prescribed by GAAP,
and the components that Avinger excludes in its calculation of
non-GAAP financial measures may differ from the components that its
peer companies exclude when they report their non-GAAP results of
operations. Avinger compensates for these limitations by providing
specific information regarding the GAAP amounts excluded from these
non-GAAP financial measures. In the future, the Company may also
exclude other non-recurring expenses and other expenses that do not
reflect the Company’s core business operating results.
Public Relations Contact:Phil PreussVP of
Marketing & Business OperationsAvinger, Inc.(650)
241-7942pr@avinger.com
Investor Contact:Mark WeinswigChief Financial
OfficerAvinger, Inc.(650) 241-7916ir@avinger.com
Matt KrepsDarrow Associates Investor Relations(214)
597-8200mkreps@darrowir.com
AVINGER, INC.CONDENSED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE
LOSS(unaudited)(In thousands,
except per share data)
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues |
$ |
2,410 |
|
|
$ |
2,020 |
|
|
$ |
6,569 |
|
|
$ |
5,887 |
|
Cost of revenues |
|
1,563 |
|
|
|
1,477 |
|
|
|
4,629 |
|
|
|
5,061 |
|
Gross profit |
|
847 |
|
|
|
543 |
|
|
|
1,940 |
|
|
|
826 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
1,371 |
|
|
|
1,404 |
|
|
|
4,120 |
|
|
|
4,340 |
|
Selling, general and administrative |
|
4,091 |
|
|
|
4,499 |
|
|
|
12,168 |
|
|
|
13,443 |
|
Total operating expenses |
|
5,462 |
|
|
|
5,903 |
|
|
|
16,288 |
|
|
|
17,783 |
|
Loss from operations |
|
(4,615 |
) |
|
|
(5,360 |
) |
|
|
(14,348 |
) |
|
|
(16,957 |
) |
Interest income |
|
70 |
|
|
|
54 |
|
|
|
242 |
|
|
|
137 |
|
Interest expense |
|
(377 |
) |
|
|
(324 |
) |
|
|
(1,091 |
) |
|
|
(5,358 |
) |
Other income (expense),
net |
|
299 |
|
|
|
242 |
|
|
|
868 |
|
|
|
710 |
|
Net loss and comprehensive
loss |
|
(4,623 |
) |
|
|
(5,388 |
) |
|
|
(14,329 |
) |
|
|
(21,468 |
) |
Accretion of preferred stock
dividends |
|
(895 |
) |
|
|
(836 |
) |
|
|
(2,685 |
) |
|
|
(2,082 |
) |
Deemed dividend arising from
beneficial conversion feature of convertible preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,216 |
) |
Net loss attributable to
common stockholders |
$ |
(5,518 |
) |
|
$ |
(6,224 |
) |
|
$ |
(17,014 |
) |
|
$ |
(28,766 |
) |
Net loss per share
attributable to common stockholders, basic and diluted |
$ |
(0.70 |
) |
|
$ |
(5.56 |
) |
|
$ |
(2.75 |
) |
|
$ |
(43.00 |
) |
Weighted average common shares
used to compute net loss per share, basic and diluted |
|
7,900 |
|
|
|
1,119 |
|
|
|
6,189 |
|
|
|
669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVINGER, INC.CONDENSED BALANCE
SHEETS(unaudited)(In thousands,
except share and per share data)
|
September 30, |
|
|
December 31, |
|
|
2019 |
|
|
2018 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
14,461 |
|
|
$ |
16,410 |
|
Accounts receivable, net of allowance for doubtful accounts of $185
and $260 at September 30, 2019 and December 31, 2018,
respectively |
|
1,301 |
|
|
|
1,154 |
|
Inventories |
|
4,112 |
|
|
|
3,422 |
|
Prepaid expenses and other current assets |
|
489 |
|
|
|
635 |
|
Total current assets |
|
20,363 |
|
|
|
21,621 |
|
|
|
|
|
|
|
|
|
Right of use asset |
|
5,192 |
|
|
|
— |
|
Property and equipment,
net |
|
1,873 |
|
|
|
2,078 |
|
Other assets |
|
579 |
|
|
|
— |
|
Total assets |
$ |
28,007 |
|
|
$ |
23,699 |
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
919 |
|
|
$ |
1,148 |
|
Accrued compensation |
|
1,189 |
|
|
|
1,197 |
|
Accrued expenses and other current liabilities |
|
681 |
|
|
|
1,449 |
|
Leasehold liability, current portion |
|
855 |
|
|
|
— |
|
Borrowings |
|
8,578 |
|
|
|
7,486 |
|
Preferred stock dividends payable |
|
2,685 |
|
|
|
2,918 |
|
Total current liabilities |
|
14,907 |
|
|
|
14,198 |
|
Leasehold liability, long-term
portion |
|
4,337 |
|
|
|
— |
|
Other long-term
liabilities |
|
9 |
|
|
|
41 |
|
Total liabilities |
|
19,253 |
|
|
|
14,239 |
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(Note 6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Convertible preferred stock issuable in series, par value of
$0.001; |
|
|
|
|
|
|
|
Shares authorized: 5,000,000 at September 30, 2019 and December 31,
2018; |
|
|
|
|
|
|
|
Shares issued and outstanding: 44,923 and 45,671 at September 30,
2019 and December 31, 2018, respectively; aggregate liquidation
preference of $47,430 and $44,718 at September 30, 2019 and
December 31, 2018, respectively |
|
— |
|
|
|
— |
|
Common stock, par value of $0.001; |
|
|
|
|
|
|
|
Shares authorized: 100,000,000 at September 30, 2019 and December
31, 2018; |
|
|
|
|
|
|
|
Shares issued and outstanding: 10,342,179 and 3,492,200 at
September 30, 2019 and December 31, 2018, respectively |
|
10 |
|
|
|
3 |
|
Additional paid-in capital |
|
351,958 |
|
|
|
338,342 |
|
Accumulated deficit |
|
(343,214 |
) |
|
|
(328,885 |
) |
Total stockholders’ equity |
|
8,754 |
|
|
|
9,460 |
|
Total liabilities and stockholders’ equity |
$ |
28,007 |
|
|
|
23,699 |
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net loss and
comprehensive loss (in
thousands)(unaudited)
|
|
For the
Three Months Ended |
|
For the Nine
Months Ended |
|
|
September |
|
September |
|
September |
|
September |
|
|
|
30, 2019 |
|
|
|
30, 2018 |
|
|
|
30, 2019 |
|
|
|
30, 2018 |
|
|
|
|
|
|
|
|
|
|
Net loss and
comprehensive loss |
$ |
(4,623 |
) |
|
$ |
(5,388 |
) |
|
$ |
(14,329 |
) |
|
$ |
(21,468 |
) |
Add: Interest
expense, net |
|
307 |
|
|
|
270 |
|
|
|
849 |
|
|
|
5,221 |
|
Add: Other income,
net |
|
(299 |
) |
|
|
(242 |
) |
|
|
(868 |
) |
|
|
(710 |
) |
Add: Stock-based
compensation |
|
523 |
|
|
|
768 |
|
|
|
1,532 |
|
|
|
2,028 |
|
Add: Certain
inventory charges |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
630 |
|
Add: Certain
depreciation and amortization charges |
|
226 |
|
|
|
217 |
|
|
|
654 |
|
|
|
735 |
|
|
Adjusted EBITDA |
$ |
(3,866 |
) |
|
$ |
(4,375 |
) |
|
$ |
(12,162 |
) |
|
$ |
(13,564 |
) |
|
|
|
|
|
|
|
|
|
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