Misonix, Inc. (Nasdaq: MSON) (“Misonix” or the “Company”), a
provider of minimally invasive therapeutic ultrasonic medical
devices and regenerative products that enhance clinical outcomes,
today reported financial results for the fiscal 2020 second quarter
ended December 31, 2019 as summarized below:
|
Three Months
Ended |
|
Six Months
Ended |
|
December 31, |
|
December 31, |
|
2019 |
2018 |
|
|
2019 |
2018 |
|
(unaudited) |
(unaudited) |
|
(unaudited) |
(unaudited) |
Revenue: |
|
|
|
|
|
Product revenue |
$ |
19,721,986 |
|
$ |
10,176,453 |
|
|
$ |
30,867,908 |
|
$ |
19,537,617 |
|
Total revenue |
$ |
19,721,986 |
|
$ |
10,176,453 |
|
|
$ |
30,867,908 |
|
$ |
19,537,617 |
|
Gross
Profit |
$ |
13,776,878 |
|
$ |
7,128,374 |
|
|
$ |
21,686,153 |
|
$ |
13,738,995 |
|
GP
Percentage - product revenue |
|
69.9 |
% |
|
70.0 |
% |
|
|
70.3 |
% |
|
70.3 |
% |
Pretax
loss |
$ |
(5,088,973 |
) |
$ |
(840,333 |
) |
|
$ |
(7,377,481 |
) |
$ |
(3,451,317 |
) |
Income tax
benefit |
$ |
- |
|
$ |
- |
|
|
$ |
4,085,000 |
|
$ |
- |
|
Net
loss |
$ |
(5,088,973 |
) |
$ |
(840,333 |
) |
|
$ |
(3,292,481 |
) |
$ |
(3,451,317 |
) |
|
|
|
|
|
|
EBITDA
(1) |
$ |
(3,290,062 |
) |
$ |
(439,786 |
) |
|
$ |
(5,082,177 |
) |
$ |
(2,684,182 |
) |
Adjusted
EBITDA (1) |
$ |
(1,925,410 |
) |
$ |
380,909 |
|
|
$ |
(1,617,966 |
) |
$ |
(195,682 |
) |
|
|
|
|
|
|
|
December 31, |
June 30, |
|
|
|
|
2019 |
2019 |
|
|
|
|
(unaudited) |
|
|
|
|
Long Term
Debt |
$ |
38,845,761 |
|
$ |
- |
|
|
|
|
Cash and
cash equivalents |
$ |
14,403,843 |
|
$ |
7,842,403 |
|
|
|
|
|
|
|
|
|
|
(1) Definitions and disclosures
regarding non-GAAP financial information including reconciliations
are included at the end of this press release.
On September 27, 2019, Misonix acquired
privately held Solsys Medical, LLC (“Solsys”). The actual results
presented for the three months ended December 31, 2019 reflect the
Company’s legacy Misonix operations as well as revenue and expenses
from the acquired Solsys operations. The comparable three-month
period ended December 31, 2018 reflects Misonix’s operations. The
actual results presented herein for the six months ended December
31, 2019 reflect the Company’s legacy Misonix operations as well as
three months and two days of revenue and three months and four days
of expenses from the acquired Solsys operations. The comparable
six-month period ended December 31, 2018 reflects Misonix’s
operations. In addition, beginning with the fiscal first
quarter of 2020, Misonix adopted certain changes in its quarterly
financial results related to the presentation of its sales
performance supplemental data to more accurately reflect the
Company’s two separate sales channels - its surgical and wound
product divisions. Going forward, the Company will present total,
domestic and international sales performance supplemental data for
its surgical and wound divisions. As a result, the Company will no
longer present total, domestic and international sales performance
supplemental data based on its consumables and equipment
products.
Second Quarter Fiscal Year 2020
Highlights:
- In September 2019, Misonix completed the acquisition of
privately held Solsys Medical, LLC, in an all-stock transaction
valued at approximately $109 million, consisting of the issuance by
Misonix of approximately 5.7 million common shares to former Solsys
unitholders.
- Fiscal second quarter 2020 revenue increased 93.8% to $19.7
million, compared to $10.2 million in fiscal second quarter 2019.
On a pro forma basis, assuming Misonix had acquired Solsys for the
full second quarter of fiscal 2019, total revenue for fiscal second
quarter 2020 increased 17.3%, including pro forma:
- Domestic surgical revenue growth of 20%.
- Domestic wound revenue growth of 20%.
- International revenue growth of 9%.
- In fiscal second quarter 2020, Misonix continued its limited
market release of the Nexus platform, with positive preliminary
results. The Company is accelerating and broadening its market
launch of Nexus in the second half of fiscal 2020.
- Gross profit percentage on sales for the fiscal second quarter
was 69.9%, compared with 70.0% in the prior fiscal year comparable
quarter.
- Operating expenses increased $10.1 million during the fiscal
second quarter of 2020 as compared with the fiscal second quarter
of 2019, including:
- $8.3 million attributable to the addition of Solsys.
- $960,000 related to a non-cash charge to reserve for a contract
asset.
- Net loss for the fiscal second quarter of 2020 was $5.1
million, or a loss of $0.33 per diluted share, compared to a net
loss of $0.8 million, or a loss of $0.09 per share, in the prior
year comparable period. The year-over-year decline was principally
attributable to the acquisition of Solsys and the contract asset
reserve.
- In December 2019, Misonix entered into an agreement providing
the Company with the exclusive US commercialization rights for
CryoLife’s NeoPatch product to treat a broad range of indications
outside of cardiac and vascular surgery.
- Subsequent to the closing of the fiscal second quarter 2020,
Misonix completed an underwritten public offering yielding net
proceeds to the Company of $32.5 million, through the issuance of
1,868,750 shares of common stock at $18.50 per share.
Stavros Vizirgianakis, President and Chief
Executive Officer of Misonix stated, “The second quarter of fiscal
2020 marked yet another period of significant change and positive
operating momentum across Misonix. Our first full quarter of
operations including Solsys combined with organic revenue growth
and our focus on leveraging our expanded sales resources, resulted
in a 94% increase in product revenue to a record $19.7 million. In
addition, the fiscal second quarter offered further evidence of the
success of Nexus, our revolutionary ultrasonic surgical platform,
as we continued to expand the installed base for this new platform.
Together, these initiatives helped us post another quarter of
strong financial growth across both our wound and surgical business
divisions.
“We are pleased with the progress we are making
in integrating Solsys into the Misonix platform and creating what
we refer to as One Misonix. With a significant sales force and the
successful creation of two separate sales teams to more effectively
and efficiently support each of our two divisions, surgical and
wound, we believe that we are better positioned to grow and evolve
our business and leverage the significant opportunities we see
ahead. In addition, the publication of two new large real-world
studies in late 2019 further proved the clinical effectiveness of
TheraSkin for the treatment of complex wounds. TheraSkin provides
us with a large direct advanced wound care channel-to-market that
we believe will enable us to grow revenue in our wound division and
help us establish Misonix’s ultrasonic technology as the standard
of care in the growing chronic wound care market.
“In addition, we are excited about the
opportunity in front of us related to our new Nexus product. While
we have been in a soft rollout and only just recently received FDA
approval and the CE mark, we have now started the process of
expanding and accelerating the rate at which we bring Nexus to
market. Nexus enables us to engage in multiple clinical
opportunities.
“I would also like to highlight our recent
agreement with CryoLife for its NeoPatch product. NeoPatch is
highly complementary to SonicOne and TheraSkin, allowing us to
further leverage the strength and potential of our expanding wound
offering to grow our share of the wound biologics market. This
agreement also reflects the value of our growing distribution base
we have built over the past few quarters. We are excited for our
launch of NeoPatch later this Spring and remain on track to
commence a full commercial phase midway through 2020.
“As we look ahead, our focus remains on
establishing a foundation that will allow Misonix to achieve
sustainable and profitable growth by leveraging our ability to
bring to market a growing portfolio of world-class solutions that
improve patient outcomes and offer a compelling value proposition
to healthcare practitioners. As we enter the second half of fiscal
2020, we remain focused on our efforts to further integrate Solsys
and increase both the capacity and utilization of our sales
resources across our two divisions, while leveraging our
distribution agreements, and, in accelerating the velocity at which
we bring Nexus to market across both new and existing customers as
we expand our market share across multiple specialties.”
Sales Performance Supplemental Data
(unaudited)
|
|
For the three months
ended |
|
|
|
|
|
|
December 31, |
|
|
Net change |
|
|
|
|
2019 |
|
|
2018 |
|
|
$ |
% |
Total |
|
|
|
|
|
|
|
|
|
|
Surgical |
|
$ |
9,988,559 |
|
$ |
8,628,587 |
|
$ |
1,359,972 |
15.8% |
Wound |
|
|
9,733,427 |
|
|
1,547,866 |
|
|
8,185,561 |
528.8% |
Total |
|
$ |
19,721,986 |
|
$ |
10,176,453 |
|
$ |
9,545,533 |
93.8% |
|
|
|
|
|
|
|
|
|
|
|
Domestic: |
|
|
|
|
|
|
|
|
|
|
Surgical |
|
$ |
5,652,381 |
|
$ |
4,706,926 |
|
$ |
945,455 |
20.1% |
Wound |
|
|
9,606,332 |
|
|
1,371,628 |
|
|
8,234,704 |
600.4% |
Total |
|
$ |
15,258,713 |
|
$ |
6,078,554 |
|
$ |
9,180,159 |
151.0% |
|
|
|
|
|
|
|
|
|
|
|
International: |
|
|
|
|
|
|
|
|
|
|
Surgical |
|
$ |
4,336,178 |
|
$ |
3,921,661 |
|
$ |
414,517 |
10.6% |
Wound |
|
|
127,095 |
|
|
176,238 |
|
|
(49,143) |
-27.9% |
Total |
|
$ |
4,463,273 |
|
$ |
4,097,899 |
|
$ |
365,374 |
8.9% |
Joe Dwyer, Chief Financial Officer, added, “We
are pleased with our results for the fiscal 2020 second quarter and
with the important accomplishments achieved thus far in fiscal
2020, including the recently completed capital raise. We believe
that the positive and constructive reception that we have received
from both new and existing shareholders reflects an appreciation of
our ability to create additional value for our shareholders over
the long-term. In addition to the capital raise, in December we
further strengthened our balance sheet with $5 million of increased
term debt financing, and expanded our revolving credit facility
from $5 million to $20 million. With these adjustments in place, we
believe that we are well capitalized to fund our operations to
profitability.
“Total operating expenses in the fiscal second
quarter of 2020 were $18.1 million, an increase of $10.1 million,
compared to $8.0 million in the prior year period, reflecting an
$8.3 million increase from the acquisition of Solsys and a $96,000
non-cash charge to reserve for a contract asset which was charged
to general and administrative expenses.
“As we move into the second half of fiscal 2020,
we continue to seek additional synergies from the integration of
Solsys and in our ability to more effectively utilize our sales
resources, including across our wound business as well as in the
accelerated roll-out of Nexus. On the back of these results and our
outlook for the balance of fiscal 2020, we reiterate our guidance
of pro forma revenue growth in excess of 20% for fiscal 2020 while
maintaining gross margins of approximately 70%.”
Fiscal Second Quarter 2020 Conference
CallMisonix will host a conference call and webcast today,
Wednesday, February 5, 2020, at 4:30 p.m. ET to discuss its
financial results and operations and host a question and answer
session. The dial in number for the audio conference call is
888-254-3590 (domestic) or 323-994-2093 (international), conference
ID 1448702. Participants may also listen to a live webcast of the
call at the Company’s website through the “Events and
Presentations” section under “Investor Relations” at
www.misonix.com. Following its completion, a replay of the
webcast will be available for 30 days on the Company’s website,
www.misonix.com.
About Misonix, Inc.Misonix,
Inc. (Nasdaq: MSON) designs, manufactures and markets
minimally invasive ultrasonic medical devices used for precise bone
sculpting, removal of soft and hard tumors and tissue debridement,
primarily in the areas of neurosurgery, orthopedic surgery, plastic
surgery, wound care and maxillo-facial surgery. The Company
combined its SonicOne wound debridement application with the
recently acquired TheraSkin product, a leading cellular skin
substitute indicated for all wound treatments. The Company’s sales
force operates as two divisions, Surgical (Neuro and Spine
Applications) and Wound. At Misonix, Better Matters to us.
That is why throughout the Company’s history, Misonix has
maintained its commitment to medical technology innovation and the
development of products that radically improve patient
outcomes.
Safe Harbor StatementWith the
exception of historical information contained in this press
release, content herein may contain “forward looking statements”
that are made pursuant to the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
based on management’s current expectations and are subject to
uncertainty and changes in circumstances. Investors are cautioned
that forward-looking statements involve risks and uncertainties
that could cause actual results to differ materially from the
statements made. These factors include general economic conditions,
delays and risks associated with the performance of contracts,
risks associated with international sales and currency
fluctuations, uncertainties as a result of research and
development, acceptable results from clinical studies, including
publication of results and patient/procedure data with varying
levels of statistical relevancy, risks involved in introducing and
marketing new products, potential acquisitions, consumer and
industry acceptance, litigation and/or court proceedings, including
the timing and monetary requirements of such activities, the timing
of finding strategic partners and implementing such relationships,
regulatory risks including approval of pending and/or contemplated
510(k) filings, the ability to achieve and maintain profitability
in the Company’s business lines, access to capital, and other
factors discussed in the Company’s Annual Report on Form 10-K for
the fiscal year ended June 30, 2019, subsequent Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K. The Company disclaims
any obligation to update its forward-looking statements.
Contact: Joe Dwyer
Norberto Aja, Jennifer NeumanChief Financial
Officer
JCIRMisonix,
Inc.
212-835-8500 or mson@jcir.com631-694-9555
Misonix, Inc. and
SubsidiariesCondensed Consolidated Statements of
Operations(Unaudited)
|
|
For the three months
ended |
|
For the six months
ended |
|
|
December 31, |
December 31, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues |
|
|
|
|
|
|
|
|
Product |
|
$ |
19,721,986 |
|
|
$ |
10,176,453 |
|
|
$ |
30,867,908 |
|
|
$ |
19,537,617 |
|
Total
revenue |
|
|
19,721,986 |
|
|
|
10,176,453 |
|
|
|
30,867,908 |
|
|
|
19,537,617 |
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
|
5,945,108 |
|
|
|
3,048,079 |
|
|
|
9,181,755 |
|
|
|
5,798,622 |
|
Gross
profit |
|
|
13,776,878 |
|
|
|
7,128,374 |
|
|
|
21,686,153 |
|
|
|
13,738,995 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Selling expenses |
|
|
11,800,565 |
|
|
|
4,800,643 |
|
|
|
17,001,147 |
|
|
|
9,535,648 |
|
General and administrative expenses |
|
|
5,149,715 |
|
|
|
2,347,184 |
|
|
|
9,357,522 |
|
|
|
5,530,568 |
|
Research and development expenses |
|
|
1,087,449 |
|
|
|
839,219 |
|
|
|
1,858,860 |
|
|
|
2,143,984 |
|
Total
operating expenses |
|
|
18,037,729 |
|
|
|
7,987,046 |
|
|
|
28,217,529 |
|
|
|
17,210,200 |
|
Loss from
operations |
|
|
(4,260,851 |
) |
|
|
(858,672 |
) |
|
|
(6,531,376 |
) |
|
|
(3,471,205 |
) |
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
5,293 |
|
|
|
17,242 |
|
|
|
24,170 |
|
|
|
37,056 |
|
Interest expense |
|
|
(833,035 |
) |
|
|
- |
|
|
|
(869,132 |
) |
|
|
- |
|
Other |
|
|
(380 |
) |
|
|
1,097 |
|
|
|
(1,143 |
) |
|
|
(17,168 |
) |
Total other
income (expense) |
|
|
(828,122 |
) |
|
|
18,339 |
|
|
|
(846,105 |
) |
|
|
19,888 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations before income taxes |
|
|
(5,088,973 |
) |
|
|
(840,333 |
) |
|
|
(7,377,481 |
) |
|
|
(3,451,317 |
) |
|
|
|
|
|
|
|
|
|
Income tax
(expense) / benefit |
|
|
- |
|
|
|
- |
|
|
|
4,085,000 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(5,088,973 |
) |
|
$ |
(840,333 |
) |
|
$ |
(3,292,481 |
) |
|
$ |
(3,451,317 |
) |
|
|
|
|
|
|
|
|
|
Net income
loss per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.33 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.37 |
) |
Diluted |
|
$ |
(0.33 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.37 |
) |
|
|
|
|
|
|
|
|
|
Weighted
average shares - Basic |
|
|
15,222,870 |
|
|
|
9,322,237 |
|
|
|
12,439,860 |
|
|
|
9,210,031 |
|
Weighted
average shares - Diluted |
|
|
15,222,870 |
|
|
|
9,322,237 |
|
|
|
12,439,860 |
|
|
|
9,210,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Misonix, Inc. and
Subsidiaries Condensed Consolidated Balance
Sheets
|
|
|
|
|
|
|
December 31, |
|
June 30, |
|
|
2019 |
|
2019 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
14,403,843 |
|
|
$ |
7,842,403 |
|
Accounts
receivable, less allowance for doubtful accounts of $100,000 and
$100,000, respectively |
|
|
12,938,009 |
|
|
|
5,360,454 |
|
Inventories,
net |
|
|
11,185,903 |
|
|
|
7,353,562 |
|
Prepaid
expenses and other current assets |
|
|
1,655,724 |
|
|
|
835,044 |
|
Total
current assets |
|
|
40,183,479 |
|
|
|
21,391,463 |
|
|
|
|
|
|
Property,
plant and equipment, net of accumulated amortization and
depreciation of $11,423,223 and $10,545,810, respectively |
|
|
6,047,483 |
|
|
|
4,198,721 |
|
Patents, net
of accumulated amortization of $1,267,978 and $1,204,589,
respectively |
|
|
787,605 |
|
|
|
779,100 |
|
Goodwill |
|
|
110,534,259 |
|
|
|
1,701,094 |
|
Contract
assets |
|
|
- |
|
|
|
960,000 |
|
Intangible
assets |
|
|
20,013,333 |
|
|
|
- |
|
Lease right
of use and other assets |
|
|
1,621,743 |
|
|
|
920,921 |
|
Total
assets |
|
$ |
179,187,902 |
|
|
$ |
29,951,299 |
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
5,856,835 |
|
|
$ |
5,357,736 |
|
Accrued
expenses and other current liabilities |
|
|
5,165,208 |
|
|
|
2,488,514 |
|
Current
portion of lease liabilities |
|
|
418,163 |
|
|
|
- |
|
Total
current liabilities |
|
|
11,440,206 |
|
|
|
7,846,250 |
|
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
Notes
payable |
|
|
38,845,761 |
|
|
|
- |
|
Lease right
of use liabilities |
|
|
810,842 |
|
|
|
- |
|
Other
non-current liabilities |
|
|
472,388 |
|
|
|
401,000 |
|
Total
liabilities |
|
|
51,569,197 |
|
|
|
8,247,250 |
|
|
|
|
|
|
Commitments
and contingencies |
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Common
stock, $.0001 and $.01 par value-shares authorized 40,000,000;
15,491,560 and 9,646,728 shares issued and outstanding in each
period |
|
|
1,549 |
|
|
|
96,468 |
|
Additional
paid-in capital |
|
|
152,802,535 |
|
|
|
43,500,478 |
|
Accumulated
deficit |
|
|
(25,185,379 |
) |
|
|
(21,892,897 |
) |
Total
shareholders' equity |
|
|
127,618,705 |
|
|
|
21,704,049 |
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
179,187,902 |
|
|
$ |
29,951,299 |
|
|
|
|
|
|
Use of Non-GAAP Financial
MeasuresThe Company has presented the following non-GAAP
financial measures in this press release: EBITDA and Adjusted
EBITDA. The Company defines EBITDA as the net income (loss) as
reported under GAAP, plus depreciation and amortization expense,
interest expense and income tax expense (benefit). The Company
defines Adjusted EBITDA as EBITDA plus non-cash stock compensation
expense, merger and acquisition fees, contract asset reserves and
engineering costs associated with its development of Nexus, its
next generation platform.
We present these non-GAAP measures because we
believe these measures are useful indicators of our operating
performance. Our management uses these non-GAAP measures
principally as a measure of our operating performance and believes
that these measures are useful to investors because they are
frequently used by analysts, investors and other interested parties
to evaluate the operating performance of companies in our industry.
We also believe that these measures are useful to our management
and investors as a measure of comparative operating performance
from period to period.
|
Three Months
Ended |
|
Six Months
Ended |
|
December 31, |
|
December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(5,088,973 |
) |
|
$ |
(840,333 |
) |
|
$ |
(3,292,481 |
) |
|
$ |
(3,451,317 |
) |
Income tax
benefit |
|
- |
|
|
|
- |
|
|
|
(4,085,000 |
) |
|
|
- |
|
Depreciation
and amortization |
|
965,876 |
|
|
|
400,547 |
|
|
|
1,426,172 |
|
|
|
767,135 |
|
Interest
expense |
|
833,035 |
|
|
|
- |
|
|
|
869,132 |
|
|
|
- |
|
EBITDA |
|
(3,290,062 |
) |
|
|
(439,786 |
) |
|
|
(5,082,177 |
) |
|
|
(2,684,182 |
) |
|
|
|
|
|
|
Non-cash
stock compensation |
|
404,652 |
|
|
|
500,088 |
|
|
|
749,736 |
|
|
|
1,504,586 |
|
M&A
transaction fees |
|
- |
|
|
|
- |
|
|
|
1,754,475 |
|
|
|
- |
|
Reserve for
contract asset |
|
960,000 |
|
|
|
- |
|
|
|
960,000 |
|
|
|
- |
|
Nexus next
generation engineering |
|
- |
|
|
|
320,607 |
|
|
|
- |
|
|
|
983,914 |
|
Adjusted
EBITDA |
$ |
(1,925,410 |
) |
|
$ |
380,909 |
|
|
$ |
(1,617,966 |
) |
|
$ |
(195,682 |
) |
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