Total Revenue Increases 11% and Net Income
Increases 21% Year-over-Year
Company Raises Full Year 2019 Revenue and
Earnings Guidance
Executing Five-Year Strategic Plan Focused on
Joint Preservation and Restoration
Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated
joint preservation and regenerative therapies company with products
leveraging its proprietary hyaluronic acid (“HA”) technology
platform, today reported financial results for the third quarter
ended September 30, 2019 and provided an update on its business
progress in the period.
“Anika delivered double-digit revenue and earnings growth in the
third quarter on the strength of growing global demand, Anika’s
expanding commercial platform, and continued fiscal discipline. The
strength of our results in the third quarter is a testament to the
hard work of the entire Anika team and reflects our continued
progress towards executing our five-year strategic plan to
transform Anika into a global commercial company focused on joint
preservation and restoration,” said Joseph Darling, President and
Chief Executive Officer of Anika Therapeutics. “In the third
quarter, we successfully completed the buildout of our hybrid
commercial salesforce in the U.S., commenced the soft launch of
TACTOSET under our hybrid commercial model and further strengthened
our leadership team. We also continued to realize the benefits of
our international expansion efforts, as evidenced by worldwide
Orthobiologics revenue growth of 11% year-over-year for the
quarter. We are confident we can continue to build on the momentum
of our strong third quarter performance and accordingly, have
raised our full year 2019 guidance. We look forward to continuing
to drive financial and operational performance as we execute on our
strategic plan to deliver growth and shareholder value.”
Third Quarter Financial Results
- Total revenue for the third quarter of 2019 increased 11%
year-over-year to $29.7 million, compared to $26.8 million for the
third quarter of 2018. The increase in total revenue was due
primarily to MONOVISC and CINGAL, which delivered revenue growth of
15% and 35% year-over-year, respectively.
- Global Viscosupplement revenue grew 9% year-over-year for the
third quarter of 2019. U.S. Viscosupplement revenue increased 7%
year-over-year for the quarter, due primarily to higher MONOVISC
revenue. International Viscosupplement revenue increased 17%
year-over-year for the quarter, due primarily to growth in demand
for CINGAL and ORTHOVISC.
- Total operating expenses for the third quarter of 2019
decreased to $17.6 million, compared to $18.2 million for the third
quarter of 2018. The decrease in total operating expenses was due
primarily to lower cost of product revenue, partially offset by
higher selling, general and administrative expenses related to the
buildout of the Company’s hybrid commercial model and the launch of
TACTOSET.
- Net income for the third quarter of 2019 was $9.2 million, or
$0.64 per diluted share, compared to net income of $7.6 million, or
$0.53 per diluted share, for the third quarter of 2018. The
increase in net income was due primarily to the increase in total
revenue and decrease in operating expenses previously
discussed.
- Adjusted EBITDA (see description below) for the third quarter
of 2019 increased 32% year-over-year to $14.9 million, compared to
$11.3 million for the third quarter of 2018. The year-over-year
improvement was due to global revenue growth and a net reduction in
operating expense as compared to the same period in 2018.
- Cash, cash equivalents and investments were $173.2 million as
of September 30, 2019, compared to $159.0 million as of December
31, 2018. The increase in cash, cash equivalents and investments
was due to approximately $24.0 million in cash provided by
operating activities for the first nine months of 2019, $21.8
million generated from employee stock option exercises during the
quarter, and was partially offset by the Company’s $30.0 million
accelerated share repurchase program commenced in May 2019.
Recent Business Highlights
- Completed the buildout of its hybrid commercial salesforce in
the U.S., including hiring four Regional Sales Directors to manage
the domestic northeast, west, southeast, and central
territories.
- Commenced the U.S. commercial soft launch of TACTOSET, Anika’s
surgically-delivered therapy for bone repair procedures, utilizing
its hybrid commercial model. The first human surgical procedure
utilizing TACTOSET was successfully completed in August 2019, and
the related soft launch of the product commenced in September.
- Strengthened its leadership team with the appointment of Mira
Leiwant to the newly-created position of Vice President of
Regulatory Affairs, Quality, and Clinical Affairs. Ms. Leiwant will
oversee the Company’s global regulatory and clinical strategy,
regulatory submissions, interactions with U.S. and international
governmental health authorities, and quality and clinical affairs
teams and processes.
- Announced five-year strategic plan to transform Anika into a
global commercial company focused on joint preservation and
restoration at Anika’s first Analyst and Investor Day on September
18, 2019. The core elements of the strategic plan include talent
and culture, commercial acceleration, R&D innovation and
inorganic growth.
Full Year 2019 Revised Corporate Outlook
- Based on currently available information, the Company expects
total revenue growth to be in the range of 6% to 7% for the full
year of 2019. Total operating expenses are now anticipated to be in
the mid-$70 million range. Adjusted EBITDA is now expected to be in
the mid- to high-$40 million range, which is based on anticipated
U.S. GAAP net income in the mid- to high-$20 million range. Capital
expenditures for the year are expected to be around $5
million.
Non-GAAP Information
To supplement the financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
is reporting Adjusted EBITDA, which is a non-GAAP financial measure
and should not be considered an alternative to net income or other
measurements under GAAP. The Company believes that Adjusted EBITDA
provides additional useful information to investors in their
assessment of its operating performance as it is a metric routinely
used by management to evaluate the Company’s performance. Adjusted
EBITDA is not calculated identically by all companies, and
therefore the Company’s measurements of Adjusted EBITDA may not be
comparable to similarly titled measures reported by other
companies. Adjusted EBITDA is defined by the Company as GAAP net
income excluding depreciation and amortization, interest and other
income (expense), income taxes and stock-based compensation
expense. A reconciliation of Adjusted EBITDA to net income, the
most directly comparable financial measure calculated and presented
in accordance with GAAP, is shown in the table below for the three-
and nine-month periods ended September 30, 2019 and 2018 (in
thousands).
For the Three Months Ended September 30, For the
Nine Months Ended September 30,
2019
2018
2019
2018
Net income
$
9,200
$
7,599
$
23,142
$
11,004
Interest and other income, net
(482
)
(522
)
(1,513
)
(907
)
Provision for income taxes
3,331
1,496
7,817
1,890
Depreciation and amortization
1,516
1,513
4,459
4,433
Stock-based compensation
1,311
1,177
4,140
10,064
Adjusted EBITDA
$
14,876
$
11,263
$
38,045
$
26,484
Conference Call Information Anika’s management will hold
a conference call and webcast to discuss its financial results and
business highlights today, Thursday, October 24 at 5:00 pm ET. The
conference call can be accessed by dialing 1-855-468-0611
(toll-free domestic) or 1-484-756-4332 (international). A live
audio webcast will be available in the "Investor Relations" section
of Anika’s website, www.anikatherapeutics.com. An accompanying
slide presentation may also be accessed via the Anika website. A
replay of the webcast will be available on Anika’s website
approximately two hours after the completion of the event.
About Anika Therapeutics, Inc. Anika Therapeutics, Inc.
(NASDAQ: ANIK) is a global, integrated joint preservation and
regenerative therapies company based in Bedford, Massachusetts.
Anika is committed to delivering therapies to improve the lives of
patients across a continuum of care from osteoarthritis pain
management to joint preservation and restoration. The Company has
over two decades of global expertise commercializing more than 20
products based on its proprietary hyaluronic acid (HA) technology
platform. For more information about Anika, please visit
www.anikatherapeutics.com.
Forward-Looking Statements The statements made in the
second paragraph and in the section captioned “Full Year 2019
Revised Corporate Outlook” of this press release, which are not
statements of historical fact, are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements include, but are not limited to, those
relating to the Company’s revised expectations with respect to its
2019 financial performance. These statements are based upon the
current beliefs and expectations of the Company’s management and
are subject to significant risks, uncertainties, and other factors.
The Company’s actual results could differ materially from any
anticipated future results, performance, or achievements described
in the forward-looking statements as a result of a number of
factors including, but not limited to, (i) the Company’s ability to
successfully commence and/or complete clinical trials of its
products on a timely basis or at all; (ii) the Company’s ability to
obtain pre-clinical or clinical data to support domestic and
international pre-market approval applications, 510(k)
applications, or new drug applications, or to timely file and
receive FDA or other regulatory approvals or clearances of its
products; (iii) that such approvals will not be obtained in a
timely manner or without the need for additional clinical trials,
other testing or regulatory submissions, as applicable; (iv) the
Company’s research and product development efforts and their
relative success, including whether we have any meaningful sales of
any new products resulting from such efforts; (v) the cost
effectiveness and efficiency of the Company’s clinical studies,
manufacturing operations, and production planning; (vi) the
strength of the economies in which the Company operates or will be
operating, as well as the political stability of any of those
geographic areas; (vii) future determinations by the Company to
allocate resources to products and in directions not presently
contemplated; (viii) the Company’s ability to successfully
commercialize its products, in the U.S. and abroad; (ix) quarterly
sales volume variation experienced by the Company, which can make
future results difficult to predict and period-to-period
comparisons potentially less meaningful; (x) the Company’s ability
to provide an adequate and timely supply of its products to its
customers; and (xi) the Company’s ability to achieve its growth
targets. Additional factors and risks are described in the
Company’s periodic reports filed with the Securities and Exchange
Commission, and they are available on the SEC’s website at
www.sec.gov. Forward-looking statements are made based on
information available to the Company on the date of this press
release, and the Company assumes no obligation to update the
information contained in this press release.
Anika Therapeutics, Inc. and SubsidiariesConsolidated
Statements of Operations(in thousands, except per share
data)(unaudited)
For the Three Months
Ended September 30, For the Nine Months Ended
September 30,
2019
2018
2019
2018
Product revenue
$
29,615
$
26,781
$
84,745
$
78,581
Licensing, milestone and contract revenue
82
6
93
18
Total revenue
29,697
26,787
84,838
78,599
Operating expenses: Cost of
product revenue
5,951
8,282
20,098
24,279
Research and development
4,158
4,232
12,581
14,126
Selling, general and administrative
7,539
5,700
22,713
28,207
Total operating expenses
17,648
18,214
55,392
66,612
Income from operations
12,049
8,573
29,446
11,987
Interest and other income, net
482
522
1,513
907
Income before income taxes
12,531
9,095
30,959
12,894
Provision for income taxes
3,331
1,496
7,817
1,890
Net income
$
9,200
$
7,599
$
23,142
$
11,004
Basic net income per share: Net
income
$
0.65
$
0.53
$
1.65
$
0.76
Basic weighted average common shares outstanding
14,070
14,237
14,065
14,524
Diluted net income per share: Net income
$
0.64
$
0.53
$
1.62
$
0.74
Diluted weighted average common shares outstanding
14,387
14,377
14,266
14,820
Anika Therapeutics,
Inc. and Subsidiaries Consolidated Balance Sheets (in
thousands, except per share data) (unaudited)
September 30, December 31,
ASSETS
2019
2018
Current assets: Cash, cash equivalents and
investments
$
173,206
$
159,014
Accounts receivable, net
23,889
20,775
Inventories, net
25,243
21,300
Prepaid expenses and other current assets
1,479
1,854
Total current assets
223,817
202,943
Property and equipment, net
51,750
54,111
Right-of-use assets
23,082
-
Other long-term assets
5,761
4,897
Intangible assets, net
7,680
9,191
Goodwill
7,489
7,851
Total assets
$
319,579
$
278,993
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable
$
2,702
$
3,143
Accrued expenses and other current liabilities
8,493
8,146
Total current liabilities
11,195
11,289
Other long-term liabilities
372
550
Deferred tax liability
4,727
3,542
Lease liabilities
21,603
-
Commitments and contingencies Stockholders’ equity:
Preferred stock, $0.01 par value
-
-
Common stock, $0.01 par value
143
142
Additional paid-in-capital
46,482
50,763
Accumulated other comprehensive loss
(6,318
)
(5,526
)
Retained earnings
241,375
218,233
Total stockholders’ equity
281,682
263,612
Total liabilities and stockholders’ equity
$
319,579
$
278,993
Anika Therapeutics, Inc. and SubsidiariesSupplemental
Financial Data Revenue by Product Line
and Product Gross Margin (in thousands, except
percentages) (unaudited)
For the Three Months Ended September
30, For the Nine Months Ended
September 30, Product Line:
2019
%
2018
%
2019
%
2018
%
Orthobiologics
$
26,765
91
%
$
24,097
90
%
$
74,975
88
%
$
69,778
88
%
Surgical
578
2
%
1,191
4
%
4,071
5
%
3,700
5
%
Dermal
417
1
%
80
1
%
990
1
%
163
1
%
Other
1,855
6
%
1,413
5
%
4,709
6
%
4,940
6
%
Product Revenue
$
29,615
100
%
$
26,781
100
%
$
84,745
100
%
$
78,581
100
%
Product Gross Profit
$
23,664
$
18,499
$
64,647
$
54,302
Product Gross Margin
80%
69%
76%
69%
Product Revenue by Geographic
Region(in thousands, except percentages)(unaudited)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
Geographic Region:
2019
%
2018
%
2019
%
2018
%
United States
$
23,437
79
%
$
21,695
81
%
$
66,462
78
%
$
63,377
81
%
Europe
3,943
13
%
3,132
12
%
11,396
14
%
9,021
11
%
Other
2,235
8
%
1,954
7
%
6,887
8
%
6,183
8
%
Product Revenue
$
29,615
100
%
$
26,781
100
%
$
84,745
100
%
$
78,581
100
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191024005823/en/
Anika Therapeutics, Inc. Joseph Darling, President & CEO
Sylvia Cheung, CFO Tel: 781-457-9000
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