Neuronetics, Inc. (NASDAQ: STIM), a commercial stage medical
technology company focused on designing, developing and marketing
products that improve the quality of life for patients who suffer
from psychiatric disorders, today announced its financial and
operating results for the third quarter of 2020.
Third Quarter 2020 Summary
- Third quarter 2020 revenue was $12.4 million, compared to third
quarter 2019 revenue of $16.0 million primarily due to the impact
of the COVID-19 pandemic
- Third quarter 2020 revenue increased 28% over the second
quarter 2020
- Third quarter 2020 operating expenses declined by 33%, or $5.9
million as compared to the third quarter of 2019 primarily as a
result of cost reduction initiatives
- Installed base was 1,143 systems, as of September 30,
2020, an increase of 11% over prior year period
- Cash and cash equivalents were $50.7 million as of September
30, 2020
“We are very pleased with our performance during the third
quarter. We saw a strong sequential rebound in the business,
increasing total quarterly revenue 28% over the second quarter, and
we made steady progress operationally with the restructuring of our
commercial organization as well as the analysis of vast clinical
datasets contained within our TrakStar system,” said Keith J.
Sullivan, President and Chief Executive Officer of Neuronetics.
“Looking ahead, we will continue refining our long-term commercial
strategy and strengthen our foundation during the fourth quarter to
execute on that strategy in 2021. We have done a great job building
momentum in key areas of the business, including reimbursement,
clinical data development, customer segmentation, and the
development of a new indication strategy, which should complement
the work we are doing with our commercial strategy to drive strong
future performance.”
Third Quarter 2020 Financial and Operating
Results
|
|
Revenues by Geography |
|
|
|
Three Months ended
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Amount |
|
|
Amount |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages) |
|
United States |
|
$ |
12,029 |
|
|
$ |
15,294 |
|
|
-21 |
% |
International |
|
|
419 |
|
|
|
706 |
|
|
-41 |
% |
Total revenues |
|
$ |
12,448 |
|
|
$ |
16,000 |
|
|
-22 |
% |
Total revenue for the third quarter of 2020 was $12.4 million, a
decrease of 22% versus third quarter 2019 revenue of $16.0 million
primarily as a result of the COVID-19 pandemic and the resulting
governmental actions to limit the spread of the virus. During the
quarter, total U.S. revenue declined by 21% and international
revenue declined by 41% over the prior year quarter. On a
sequential basis, total revenue increased 28% over the second
quarter of 2020.
|
|
United States Revenues by Product Category
Three Months ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Amount |
|
|
Amount |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages) |
NeuroStar Advanced Therapy System |
|
$ |
2,541 |
|
|
$ |
4,616 |
|
|
-45 |
% |
Treatment sessions |
|
|
9,083 |
|
|
|
10,252 |
|
|
-11 |
% |
Other |
|
|
405 |
|
|
|
426 |
|
|
-5 |
% |
Total United States revenues |
|
$ |
12,029 |
|
|
$ |
15,294 |
|
|
-21 |
% |
|
|
United States NeuroStar AdvancedTherapy
System Revenues by TypeThree Months ended
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Amount |
|
|
Amount |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages) |
|
NeuroStar Capital |
|
$ |
2,438 |
|
|
$ |
4,264 |
|
|
-43 |
% |
Operating lease |
|
|
88 |
|
|
|
185 |
|
|
-52 |
% |
Other |
|
|
15 |
|
|
|
167 |
|
|
-91 |
% |
Total U.S. NeuroStar Advanced |
|
|
|
|
|
|
|
|
|
|
|
Therapy System revenues |
|
$ |
2,541 |
|
|
$ |
4,616 |
|
|
-45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. NeuroStar Advanced Therapy System revenue for the third
quarter of 2020 was $2.5 million, a decrease of 45% versus third
quarter 2019 revenue of $4.6 million. The decrease was primarily
driven by a lower number of NeuroStar systems sold in the quarter
as many prospective customers limited access to their offices in
response to the COVID-19 pandemic. In the quarter, the Company sold
39 systems, down from 68 systems in the third quarter of 2019. On a
sequential basis, U.S. NeuroStar Advanced Therapy System revenue
increased 9% over the second quarter of 2020.
As of September 30, 2020, the installed base in the U.S. was
1,143 systems. This represents an increase of 111 units, or 11%,
over the installed base as of September 30, 2019.
U.S. treatment session revenue for the third quarter of 2020 was
$9.1 million, a decrease of 11% versus third quarter 2019 revenue
of $10.3 million. The decrease was primarily driven by a reduction
in per click treatment session volume during the quarter as a
result of COVID-19. On a sequential basis, U.S. treatment session
revenue increased 39% over the second quarter of 2020.
Gross margin for the third quarter of 2020 was 78.7% compared to
third quarter 2019 gross margin of 73.9%. The increase was
primarily a result of a change in the product mix of revenues
versus the prior year as well as reduced field service
expenses.
Operating expenses during the third quarter of 2020 were $12.2
million, a decrease of $5.9 million compared to $18.1 million in
the third quarter of 2019. The decrease was primarily due to
reduced sales and marketing expenses as well as reduced research
and development costs.
Net loss for the third quarter of 2020 was $(3.4) million, or
$(0.18) per share, as compared to third quarter 2019 net loss of
$(6.9) million, or $(0.37) per share. Net loss per share was based
on 18,809,335 and 18,507,558 weighted-average ordinary shares
outstanding for the third quarters of 2020 and 2019,
respectively.
EBITDA for the third quarter of 2020 was $(2.2) million as
compared to the third quarter of 2019 EBITDA of $(5.6) million. See
the accompanying financial table that reconciles EBITDA, which is a
non-GAAP financial measure, to net loss.
Cash and cash equivalents were $50.7 million as of September 30,
2020. This compares to cash and cash equivalents of $63.6 million
as of September 30, 2019 and $75.7 million as of December 31,
2019.
Business Outlook
For the full year 2020, the Company expects total revenue to be
in the range of $46.7 to $47.2 million, which implies a revenue
range for the fourth quarter of 2020 of $13.0 to $13.5 million.
For the full year 2020, the Company expects total operating
expenses to be in the range of $59.0 to $61.0 million.
Webcast and Conference Call Information
Neuronetics’ management team will host a conference call on
November 2, 2020 beginning at 4:30 p.m. Eastern Time. Investors
interested in listening to the conference call on your telephone
should dial (877) 472-8990 for United States callers or +1 (629)
228-0778 for international callers and reference confirmation code
1872153, approximately ten minutes prior to start time. To access
the live audio webcast or subsequent archived recording, visit the
Investor Relations section of Neuronetics’ website at
ir.neuronetics.com. The replay will be available on the Company's
website for approximately 60 days.
About Neuronetics
Neuronetics, Inc. is a commercial-stage medical technology
company focused on designing, developing, and marketing products
that improve the quality of life for patients who suffer from
psychiatric disorders. Our first commercial product, the NeuroStar®
Advanced Therapy System, is a non-invasive and non-systemic
office-based treatment that uses transcranial magnetic stimulation,
or TMS, to create a pulsed, MRI-strength magnetic field that
induces electrical currents designed to stimulate specific areas of
the brain associated with mood. The system is cleared by the United
States Food and Drug Administration, or FDA, for the treatment of
major depressive disorder in adult patients who have failed to
achieve satisfactory improvement from prior antidepressant
medication in the current episode. NeuroStar is also available in
other parts of the world, including Japan, where it is listed under
Japan’s national health insurance. Additional information can be
found at www.neuronetics.com.
“Safe harbor” statement under the Private Securities
Litigation Reform Act of 1995:
Statements in the press release regarding Neuronetics, Inc. (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 quarter and fiscal year 2020,
including with respect to revenue, gross margins, operating
expense, the level of new system sales, utilization levels and any
specific projections provided; the Company’s expectations regarding
domestic and international growth opportunities, additional
indications and the build out of its NeuroStar Advanced Therapy
System platform; expectations or beliefs regarding future events,
potential markets or market size, and technological developments;
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 COVID-19 on
general political and economic conditions, including as a result of
efforts by governmental authorities to mitigate COVID-19, such as
travel bans, shelter in place orders and third-party business
closures and the related impact on resource allocations,
manufacturing and supply chains and patient access to commercial
products; the Company’s ability to execute its business continuity,
operational and budget plans in light of the COVID-19 outbreak; the
Company’s ability to achieve or sustain profitable operations due
to its history of losses; the Company’s reliance on the sale and
usage of its NeuroStar Advanced Therapy System to generate
revenues; the scale and efficacy of the Company’s salesforce;
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
respect of 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; and developments in regulation in the United States
and other applicable jurisdictions. For a discussion of these and
other related risks, please refer to the Company’s recent SEC
filings which are available on the SEC’s website at
www.sec.gov. These forward-looking statements are based on the
Company's expectations and assumptions as of the date of this press
release. Except as required by law, the Company undertakes no duty
or obligation to update any forward-looking statements contained in
this press release as a result of new information, future events or
changes in the Company's expectations.
Investor Contact:
Mark R. KlausnerWestwicke Partners
443-213-0501ir@neuronetics.com
Media Contact:
Chelsey MankoVault
Communications610-455-2778cmanko@vaultcommunications.com
|
|
NEURONETICS, INC.Statements of
Operations(Unaudited; In thousands, except per
share data) |
|
|
|
|
|
|
|
|
|
Three Months ended |
|
|
Nine Months ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenues |
|
$ |
12,448 |
|
|
$ |
16,000 |
|
|
$ |
33,665 |
|
|
$ |
45,300 |
|
Cost of revenues |
|
|
2,657 |
|
|
|
4,192 |
|
|
|
7,791 |
|
|
|
11,170 |
|
Gross Profit |
|
|
9,791 |
|
|
|
11,808 |
|
|
|
25,874 |
|
|
|
34,130 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
6,053 |
|
|
|
10,362 |
|
|
|
24,927 |
|
|
|
31,477 |
|
General and administrative |
|
|
4,210 |
|
|
|
4,285 |
|
|
|
13,508 |
|
|
|
13,145 |
|
Research and development |
|
|
1,952 |
|
|
|
3,489 |
|
|
|
7,089 |
|
|
|
9,499 |
|
Total operating expenses |
|
|
12,215 |
|
|
|
18,136 |
|
|
|
45,524 |
|
|
|
54,121 |
|
Loss from Operations |
|
|
(2,424 |
) |
|
|
(6,328 |
) |
|
|
(19,650 |
) |
|
|
(19,991 |
) |
Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
1,002 |
|
|
|
930 |
|
|
|
4,435 |
|
|
|
2,780 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Other expense (income), net |
|
|
(8 |
) |
|
|
(391 |
) |
|
|
(288 |
) |
|
|
(1,281 |
) |
Net Loss |
|
$ |
(3,418 |
) |
|
$ |
(6,867 |
) |
|
$ |
(23,797 |
) |
|
$ |
(21,490 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share of common
stock outstanding, basic and diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.37 |
) |
|
$ |
(1.27 |
) |
|
$ |
(1.17 |
) |
Weighted-average common shares
outstanding, basic and diluted |
|
|
18,890 |
|
|
|
18,508 |
|
|
|
18,773 |
|
|
|
18,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEURONETICS, INC.Balance
Sheets(Unaudited; In thousands, except per share
data) |
|
|
|
|
|
September 30,2020 |
|
|
December 31,2019 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
50,719 |
|
|
$ |
75,708 |
|
Accounts receivable, net |
|
|
5,564 |
|
|
|
6,569 |
|
Inventory |
|
|
3,779 |
|
|
|
2,775 |
|
Current portion of net investments in sales-type leases |
|
|
1,626 |
|
|
|
880 |
|
Current portion of prepaid commission expense |
|
|
850 |
|
|
|
689 |
|
Prepaid expenses and other current assets |
|
|
2,662 |
|
|
|
1,830 |
|
Total current assets |
|
|
65,200 |
|
|
|
88,451 |
|
Property and equipment,
net |
|
|
787 |
|
|
|
1,107 |
|
Operating lease right-of-use
assets |
|
|
3,515 |
|
|
|
3,796 |
|
Net investments in sales-type
leases |
|
|
2,255 |
|
|
|
1,730 |
|
Prepaid commission
expense |
|
|
4,688 |
|
|
|
3,779 |
|
Other assets |
|
|
1,894 |
|
|
|
1,305 |
|
Total Assets |
|
$ |
78,339 |
|
|
$ |
100,168 |
|
Liabilities and
Stockholders’
Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,368 |
|
|
$ |
4,625 |
|
Accrued expenses |
|
|
6,171 |
|
|
|
9,031 |
|
Deferred revenue |
|
|
2,115 |
|
|
|
2,228 |
|
Current portion of operating lease liabilities |
|
|
585 |
|
|
|
559 |
|
Current portion of long-term debt, net |
|
|
34,542 |
|
|
|
11,250 |
|
Total current liabilities |
|
|
45,781 |
|
|
|
27,693 |
|
Long-term debt, net |
|
|
- |
|
|
|
19,898 |
|
Deferred revenue |
|
|
1,863 |
|
|
|
2,106 |
|
Operating lease
liabilities |
|
|
3,217 |
|
|
|
2,619 |
|
Total Liabilities |
|
|
50,861 |
|
|
|
52,316 |
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value: 10,000 shares authorized; no
shares issued or outstanding at September 30, 2020
and December 31, 2019 |
|
|
- |
|
|
|
- |
|
Common stock, $0.01 par value: 200,000 shares authorized; 18,809
and 18,645 shares issued and outstanding at
September 30, 2020 and December 31, 2019,
respectively |
|
|
189 |
|
|
|
186 |
|
Additional paid-in capital |
|
|
301,172 |
|
|
|
297,753 |
|
Accumulated deficit |
|
|
(273,883 |
) |
|
|
(250,087 |
) |
Total Stockholders' Equity |
|
|
27,478 |
|
|
|
47,852 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
78,339 |
|
|
$ |
100,168 |
|
|
|
|
|
|
|
|
|
|
NEURONETICS, INC.Statements of Cash
Flows(Unaudited; In thousands) |
|
|
Nine Months ended
September 30, |
|
|
|
2020 |
|
|
2019 |
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(23,796 |
) |
|
$ |
(21,490 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
741 |
|
|
|
765 |
|
Share-based compensation |
|
|
2,888 |
|
|
|
2,458 |
|
Non-cash interest expense |
|
|
1,113 |
|
|
|
555 |
|
Cost of rental units purchased by customers |
|
|
150 |
|
|
|
144 |
|
Loss on extinguishment of debt |
|
|
622 |
|
|
|
- |
|
Changes in certain assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
1,005 |
|
|
|
(1,933 |
) |
Inventory |
|
|
(1,004 |
) |
|
|
(455 |
) |
Net investment in sales-type leases |
|
|
(1,271 |
) |
|
|
(1,774 |
) |
Leasehold reimbursement |
|
|
875 |
|
|
|
- |
|
Prepaid commission expense |
|
|
(1,070 |
) |
|
|
(2,907 |
) |
Prepaid expenses and other assets |
|
|
(1,263 |
) |
|
|
183 |
|
Accounts payable |
|
|
(2,340 |
) |
|
|
10 |
|
Accrued expenses |
|
|
(2,981 |
) |
|
|
80 |
|
Deferred revenue |
|
|
(356 |
) |
|
|
285 |
|
Net Cash Used in Operating Activities |
|
|
(26,687 |
) |
|
|
(24,079 |
) |
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment and capitalized software |
|
|
(615 |
) |
|
|
(454 |
) |
Net Cash Used in Investing Activities |
|
|
(615 |
) |
|
|
(454 |
) |
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
41,360 |
|
|
|
- |
|
Repayment of long-term debt |
|
|
(38,860 |
) |
|
|
- |
|
Payments of debt issuance costs |
|
|
(721 |
) |
|
|
- |
|
Proceeds from exercises of stock options |
|
|
534 |
|
|
|
2,320 |
|
Net Cash Provided by Financing Activities |
|
|
2,313 |
|
|
|
2,320 |
|
Net Decrease in Cash and Cash Equivalents |
|
|
(24,989 |
) |
|
|
(22,213 |
) |
Cash and Cash Equivalents, Beginning of Period |
|
|
75,708 |
|
|
|
104,583 |
|
Cash and Cash Equivalents, End of Period |
|
$ |
50,719 |
|
|
$ |
82,370 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures (Unaudited)
EBITDA is not a measure of financial performance under generally
accepted accounting principles in the United States, or 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, since 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 |
|
|
Nine Months ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
Reconciliation |
|
(in thousands) |
|
|
(in thousands) |
|
Net loss |
|
$ |
(3,418 |
) |
|
$ |
(6,867 |
) |
|
$ |
(23,797 |
) |
|
$ |
(21,490 |
) |
Interest expense |
|
|
1,002 |
|
|
|
930 |
|
|
|
4,435 |
|
|
|
2,780 |
|
Income taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Depreciation and amortization |
|
|
207 |
|
|
|
308 |
|
|
|
741 |
|
|
|
765 |
|
EBITDA |
|
$ |
(2,209 |
) |
|
$ |
(5,629 |
) |
|
$ |
(18,621 |
) |
|
$ |
(17,945 |
) |
Neuronetics (NASDAQ:STIM)
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From Mar 2024 to Apr 2024
Neuronetics (NASDAQ:STIM)
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From Apr 2023 to Apr 2024