Total Revenue Increased 16% Year-over-Year
Solid Bottom Line Performance with $0.31
Diluted EPS
New Leadership Added to Accelerate Innovation
and Expand Commercial Reach
Announces $50 Million Share Repurchase
Program
Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated
orthopedic and regenerative medicines company specializing in
therapeutics based on its proprietary hyaluronic acid (“HA”)
technology, today reported financial results for the first quarter
ended March 31, 2019, and provided an update on its business
progress in the period.
“Anika is off to a strong start in 2019, with double-digit
revenue growth year-over-year in all product franchises and solid
earnings in the first quarter,” said Joseph Darling, President and
Chief Executive Officer of Anika Therapeutics. “We have made
continued progress transforming Anika into a global commercial
company positioned to deliver a continuum of orthopedic and
regenerative medicine therapies. We strengthened our executive
leadership team with the appointment of a Vice President of
Research and Development and a Vice President of U.S. Sales,
expanded our international commercial team and remain on track to
launch our first surgically-delivered therapy for bone repair
procedures in the U.S. under our hybrid commercial model in the
second half of 2019. Additionally, we are pleased to return capital
to shareholders through our $50 million share repurchase
program.”
First Quarter Financial Results
- Total revenue for the first quarter of
2019 increased 16% year-over-year to $24.7 million, compared to
$21.3 million for the first quarter of 2018. The increase was due
primarily to higher global revenue from the Company’s
Viscosupplement franchise and HYAFF-based products.
- U.S. and international Viscosupplement
revenue each increased by 11% in the quarter as compared to 2018.
The increase in U.S. Viscosupplement revenue was due primarily to
the timing and volume of orders placed in the quarter, while the
increase in International Viscosupplement revenue was driven
principally by an 18% year-over-year increase in international
revenue from single injection products.
- Total operating expenses for the first
quarter of 2019 were $19.2 million, compared to $29.1 million for
the first quarter of 2018. The decrease in total operating expenses
was due primarily to a one-time charge of $8.4 million in the first
quarter of 2018, which consisted mainly of non-cash stock-based
compensation expense associated with the retirement of Anika’s
former Chief Executive Officer.
- Net income for the first quarter of
2019 was $4.5 million, or $0.31 per diluted share, compared to a
net loss of $6.7 million, or ($0.46) per diluted share, for the
first 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 first quarter of 2019 was $8.3 million, compared to $1.2
million for the first quarter of 2018. The improvement resulted
from the same factors as previously set forth for the increase in
net income.
- Cash, cash equivalents and investments
were $166.7 million as of March 31, 2019, compared to $159.0
million as of December 31, 2018. Cash provided by operating
activities was $8.5 million for the first quarter of 2019.
Recent Business Highlights
- Strengthened the executive leadership
team with the appointments of Robert Richard, Ph.D., as Vice
President of Research and Development, and Stephen Goldy, as Vice
President of U.S. Sales.
- Executed commercial expansion plans,
including the enhancement of international business development and
marketing capabilities and the acceleration of planning activities
associated with the launch of its first surgically-delivered
regenerative therapy for bone repair procedures in the U.S.
utilizing the Company’s hybrid commercial model in the second half
of 2019.
- Announced a $50 million share
repurchase program, which will include a $30 million accelerated
share repurchase program and up to an additional $20 million of
common stock purchased on the open market.
- Continued to evaluate the clinical and
regulatory path forward for CINGAL U.S. Food and Drug
Administration approval, and refreshing primary market research
ahead of Anika’s final decision on go forward path. The Company
will provide an update on its complete assessment by the time it
reports financial results for the second quarter of 2019.
- On schedule to complete a 5-year
strategic plan in the third quarter of 2019, which Anika intends to
unveil at its 2019 Analyst and Investor Day this fall.
Non-GAAP InformationTo 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 as it is a metric routinely used by the
Company to evaluate its operating performance and to establish
goals for managing its business. 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 months ended March 31, 2019 and
2018 (in thousands).
For the Three Months Ended March
31, 2019 2018 Net income $ 4,507 $ (6,686 )
Interest and other income, net (498 ) (95 ) Provision for income
taxes 1,473 (1,051 ) Depreciation and amortization 1,477 1,473
Stock-based compensation 1,386 7,565
Adjusted EBITDA $ 8,345 $ 1,206
Conference Call InformationAnika’s management will hold a
conference call and webcast to discuss its financial results and
business highlights today, Thursday, May 2 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 orthopedic and regenerative
medicines company based in Bedford, Massachusetts. Anika is
committed to improving the lives of patients with degenerative
orthopedic diseases and traumatic conditions with clinically
meaningful therapies along the continuum of care, from palliative
pain management to regenerative tissue repair. The Company has over
two decades of global expertise developing, manufacturing, and
commercializing more than 20 products based on its proprietary
hyaluronic acid (HA) technology. Anika's orthopedic medicine
portfolio includes ORTHOVISC®, MONOVISC®, and CINGAL®, which
alleviate pain and restore joint function by replenishing depleted
HA, and HYALOFAST, a solid HA-based scaffold to aid cartilage
repair and regeneration. For more information about Anika, please
visit www.anikatherapeutics.com.
Forward-Looking StatementsThe statements made in the
third and fourth sentences of the second paragraph and the second,
third, fourth, and fifth bullet points in the section captioned
“Recent Business Highlights” 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 plans for the launch of its
surgically-delivered therapy for bone repair, the timing and
mechanism of the Company’s share repurchase program, the status and
plans related to the Company’s assessment of the regulatory pathway
and market analysis for CINGAL, and the status and completion of
the Company’s 5-year strategic plan. 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 March 31, 2019 2018 Product
revenue $ 24,717 $ 21,258 Licensing, milestone and contract revenue
6 6 Total revenue 24,723 21,264
Operating expenses: Cost of product revenue 7,311 7,845 Research
and development 4,258 5,161 Selling, general and administrative
7,672 16,090 Total operating expenses
19,241 29,096 Income (loss) from operations 5,482
(7,832 ) Interest and other income, net 498 95
Income (loss) before income taxes 5,980 (7,737 ) Provision for
(benefit from) income taxes 1,473 (1,051 ) Net income
(loss) $ 4,507 $ (6,686 ) Basic net income (loss) per share:
Net income (loss) $ 0.32 $ (0.46 ) Basic weighted average common
shares outstanding 14,185 14,679 Diluted net income (loss) per
share: Net income (loss) $ 0.31 $ (0.46 ) Diluted weighted average
common shares outstanding 14,314 14,679
Anika Therapeutics, Inc.
and SubsidiariesConsolidated Balance Sheets(in
thousands, except per share data)(unaudited)
ASSETS
March 31,2019
December 31,2018
Current assets: Cash, cash equivalents and investments $ 166,736 $
159,014 Accounts receivable, net 18,265 20,775 Inventories, net
22,617 21,300 Prepaid expenses and other current assets
2,077 1,854 Total current assets 209,695
202,943 Property and equipment, net 53,051 54,111 Right-of-use
assets 23,748 - Other long-term assets 4,003 4,897 Intangible
assets, net 8,467 9,191 Goodwill 7,695 7,851
Total assets $ 306,659 $ 278,993
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable $ 3,571 $ 3,143 Accrued expenses and other current
liabilities 8,031 8,146 Total current
liabilities 11,602 11,289 Other long-term liabilities 366 550
Deferred tax liability 3,388 3,542 Lease liabilities 22,232 -
Commitments and contingencies Stockholders’ equity: Preferred
stock, $0.01 par value - - Common stock, $0.01 par value 142 142
Additional paid-in-capital 52,030 50,763 Accumulated other
comprehensive loss (5,841 ) (5,526 ) Retained earnings
222,740 218,233 Total stockholders’ equity
269,071 263,612 Total liabilities and
stockholders’ equity $ 306,659 $ 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 March 31, Product Line:
2019
%
2018
%
Orthobiologics $ 21,748 88% $ 19,489 92% Surgical 1,392 5% 1,245 6%
Dermal 129 1% (539) -3% Other 1,448 6%
1,063 5% Product Revenue $ 24,717 100%
$ 21,258 100% Product Gross Profit $ 17,406 $
13,413 Product Gross Margin 70% 63%
Product Revenue by
Geographic Region(in thousands, except
percentages)(unaudited)
For the Three Months Ended
March 31, Geographic Region:
2019
%
2018
%
United States $ 20,089 81% $ 16,910 79% Europe 2,526 10% 2,391 11%
Other 2,102 9% 1,957 10%
Product Revenue $ 24,717 100% $ 21,258
100%
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version on businesswire.com: https://www.businesswire.com/news/home/20190502005809/en/
Anika Therapeutics, Inc.Joseph Darling, President & CEO
Sylvia Cheung, CFOTel: 781-457-9000
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