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 June 30, 2019.
Second Quarter and Recent Highlights
- Increased revenue 26% from the first quarter 2019, to $2.3
million, on continued strong growth in
Pantheris® utilization
- Grew Pantheris revenue 43% in the first half of 2019, to $2.0
million, compared to the first half of 2018
- Improved gross margin to 31% on increased sales volume,
compared with 20% in the first quarter
- Reduced net loss and comprehensive loss 8% from the first
quarter, to $4.7 million
- Improved adjusted EBITDA loss 9% from the first quarter, to
$4.0 million, the lowest level in more than 3 years
- Initiated Pantheris SV (Small Vessel) limited launch and
successfully treated first patients at multiple sites in the U.S.
in July
- Continued international expansion with the signing of a
distribution agreement for Hong Kong and completion of initial
Ocelot cases in Australia
- Reported positive clinical outcomes across multiple papers,
presentations and clinical conferences, including 5 podium
presentations and a live case transmission at CVC 2019
- Further strengthened the balance sheet with $8.0 million in
proceeds received in the first half of 2019 from warrant exercises
related to prior underwritten public offerings
- Regained compliance with Nasdaq listing requirements
Jeff Soinski, Avinger’s president and CEO, commented, “We are
excited to report significantly improved operating results driven
by a 26% sequential increase in revenue and an improved gross
margin. As we look forward to additional growth opportunities, we
have made substantial progress on expanding our sales team with 26
sales professionals actively marketing our platform to centers
across the United States, including increased coverage in the
Southeast and Southwest sales territories. We expect to further
expand our sales footprint and increase the number of active
Lumivascular accounts throughout the remainder of the year along
with the rollout of our Pantheris SV product.
“We began treating patients in July with our new Pantheris SV
platform at multiple key U.S. sites and are excited about the
successful outcomes in our first cases. Pantheris SV is a
complementary treatment which can be efficiently added to existing
centers, enabling our sites to treat a greater share of their
atherectomy patients using Avinger’s best-in-class technology. We
estimate this compelling platform will increase our available
atherectomy market by as much as 50% annually, or approximately
$180 million.”
Second Quarter 2019 Financial ResultsTotal
revenue was $2.3 million for the second quarter of 2019, an
increase of 26% from the first quarter of 2019, and an increase of
13% compared to the second quarter of 2018, reflecting strong
growth in both Pantheris and Ocelot.
Gross margin for the second quarter of 2019 was 31%, compared to
20% for the first quarter of 2019 and -5% for the second quarter of
2018. Operating expenses for the second quarter of 2019 were $5.4
million, flat compared to the first quarter and a decrease of 3%
from the second quarter of 2018.
Net loss and comprehensive loss for the second quarter of 2019
was $4.7 million, a decrease of 8%, from $5.1 million in the first
quarter of 2019 and a decrease of 20% from $5.8 million in the
second quarter of 2018.
Adjusted EBITDA, as defined under non-GAAP measures in this
press release, was a loss of $4.0 million, an improvement of 9%
compared to a loss of $4.3 million for the first quarter of 2019,
and an improvement of 6% compared to a loss of $4.2 million for the
second quarter of 2018.
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
$14.8 million as of June 30, 2019, compared with $16.7 million as
of March 31, 2019.
On June 21, 2019, Avinger effected a 1-for-10 reverse stock
split in order to regain compliance with the Nasdaq minimum bid
price requirement. Avinger received notification that it had
regained compliance on July 9, 2019.
As of June 30, 2019, Avinger had approximately 6.4 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 250 shares of the Company’s common stock at a
conversion price of $4.00.
Conference Call Avinger will hold a conference
call today, July 31, 2019 at 4:30pm ET to discuss its second
quarter 2019 financial results.
Individuals interested in listening to the conference call may
do so by dialing 844-407-9500 for domestic callers or
+1-862-298-0850 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 July 31, 2019
at approximately 7:30pm PT/ 10:30pm ET through August 7, 2019. To
access the replay, dial +1-919-882-2331 and reference Conference
ID: 51715. 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, expectations regarding the number
of active Lumivascular accounts, the increase of our available
atherectomy market, the impact of Pantheris SV on our addressable
market, and our anticipated commercial launch and roll-out of
Pantheris SV. 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 MeasuresAvinger 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 Weinswig Chief Financial
Officer Avinger, Inc. (650) 241-7916 ir@avinger.com
Matt KrepsDarrow Associates Investor Relations(214)
597-8200mkreps@darrowir.com
Condensed Statements of Operations and Comprehensive
Loss |
(in thousands)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
|
June 30, |
|
|
|
March 31, |
|
|
|
June 30, |
|
|
|
June 30, |
|
|
|
June 30, |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
2,319 |
|
|
$ |
1,840 |
|
|
$ |
2,058 |
|
$ |
4,159 |
|
|
$ |
3,867 |
|
Cost of revenue |
|
1,599 |
|
|
|
1,467 |
|
|
|
2,169 |
|
|
|
3,066 |
|
|
|
3,584 |
|
Gross profit (loss) |
|
720 |
|
|
|
373 |
|
|
|
(111 |
) |
|
|
1,093 |
|
|
|
283 |
|
|
|
31 |
% |
|
|
20 |
% |
|
|
-5 |
% |
|
|
26 |
% |
|
|
7 |
% |
Operating expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
1,335 |
|
|
|
1,414 |
|
|
|
1,159 |
|
|
|
2,749 |
|
|
|
2,936 |
|
Selling, general, and administrative |
|
4,091 |
|
|
|
3,986 |
|
|
|
4,444 |
|
|
|
8,077 |
|
|
|
8,944 |
|
Total operating expense |
|
5,426 |
|
|
|
5,400 |
|
|
|
5,603 |
|
|
|
10,826 |
|
|
|
11,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income/(loss) |
|
(4,706 |
) |
|
|
(5,027 |
) |
|
|
(5,714 |
) |
|
|
(9,733 |
) |
|
|
(11,597 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(274 |
) |
|
|
(268 |
) |
|
|
(312 |
) |
|
|
(542 |
) |
|
|
(4,951 |
) |
Other income, net |
|
329 |
|
|
|
240 |
|
|
|
227 |
|
|
|
569 |
|
|
|
468 |
|
Net loss and comprehensive loss |
|
(4,651 |
) |
|
|
(5,055 |
) |
|
|
(5,799 |
) |
|
|
(9,706 |
) |
|
|
(16,080 |
) |
Accretion of preferred stock dividends |
|
(895 |
) |
|
|
(895 |
) |
|
|
(836 |
) |
|
|
(1,790 |
) |
|
|
(1,246 |
) |
Deemed dividend arising from beneficial conversion feature of
convertible preferred stock |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
(5,216 |
) |
Net loss attributable to common stockholders |
$ |
(5,546 |
) |
|
$ |
(5,950 |
) |
|
$ |
(6,635 |
) |
|
$ |
(11,496 |
) |
|
$ |
(22,542 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common stockholders basic
and diluted |
$ |
(0.87 |
) |
|
$ |
(1.40 |
) |
|
$ |
(9.83 |
) |
|
$ |
(2.16 |
) |
|
$ |
(51.82 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares used to compute net loss per
share, basic and diluted |
|
6,377 |
|
|
|
4,248 |
|
|
|
675 |
|
|
|
5,319 |
|
|
|
435 |
|
Condensed Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share amounts)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
December 31, |
|
|
|
March 31, |
|
Assets |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
Current
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
14,754 |
|
|
$ |
16,410 |
|
|
$ |
16,707 |
|
|
|
Accounts receivable, net of
allowance for doubtful accounts of $218 and $260 at June 30,
2019 and December 31, 2018, respectively |
|
1,210 |
|
|
|
1,154 |
|
|
|
1,112 |
|
|
|
Inventories |
|
4,105 |
|
|
|
3,422 |
|
|
|
3,955 |
|
|
|
Prepaid expenses and other
current assets |
|
764 |
|
|
|
635 |
|
|
|
1,026 |
|
|
Total current
assets |
|
20,833 |
|
|
|
21,621 |
|
|
|
22,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Right of use asset |
|
5,596 |
|
|
|
- |
|
|
|
1,313 |
|
Property and equipment, net |
|
2,006 |
|
|
|
2,078 |
|
|
|
2,140 |
|
Other assets |
|
384 |
|
|
|
- |
|
|
|
- |
|
|
Total assets |
$ |
28,819 |
|
|
$ |
23,699 |
|
|
$ |
26,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
(deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
1,086 |
|
|
$ |
1,148 |
|
|
$ |
969 |
|
|
|
Accrued compensation |
|
1,439 |
|
|
|
1,197 |
|
|
|
1,016 |
|
|
|
Accrued expenses and other
current liabilities |
|
776 |
|
|
|
1,449 |
|
|
|
906 |
|
|
|
Leasehold liability |
|
1,063 |
|
|
|
- |
|
|
|
1,313 |
|
|
|
Borrowings |
|
8,201 |
|
|
|
7,486 |
|
|
|
7,837 |
|
|
|
Preferred stock dividends
payable |
|
1,790 |
|
|
|
2,918 |
|
|
|
895 |
|
|
Total current
liabilities |
|
14,355 |
|
|
|
14,198 |
|
|
|
12,936 |
|
Leasehold liability |
|
4,533 |
|
|
|
|
|
|
|
|
|
Other long-term liabilities |
|
11 |
|
|
|
41 |
|
|
|
38 |
|
|
Total
liabilities |
|
18,899 |
|
|
|
14,239 |
|
|
|
12,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock,
par value $0.001 |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Common stock, par value
$0.001 |
|
6 |
|
|
|
3 |
|
|
|
6 |
|
|
|
Additional paid-in
capital |
|
348,505 |
|
|
|
338,342 |
|
|
|
347,213 |
|
|
|
Accumulated deficit |
|
(338,591 |
) |
|
|
(328,885 |
) |
|
|
(333,940 |
) |
|
Total
stockholders' equity |
|
9,920 |
|
|
|
9,460 |
|
|
|
13,279 |
|
|
Total liabilities
and stockholders' equity |
$ |
28,819 |
|
|
$ |
23,699 |
|
|
$ |
26,253 |
|
Reconciliation of Adjusted EBITDA to Net loss and
comprehensive loss |
(in
thousands) |
(unaudited) |
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
|
|
June 30, |
|
|
|
March 31, |
|
|
|
June 30, |
|
|
|
June 30, |
|
|
|
June 30, |
|
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
comprehensive loss |
$ |
(4,651 |
) |
|
$ |
(5,055 |
) |
|
$ |
(5,799 |
) |
|
$ |
$ (9,706 |
) |
|
$ |
(16,080 |
) |
Add: Interest
expense, net |
|
274 |
|
|
|
268 |
|
|
|
312 |
|
|
|
542 |
|
|
|
4,951 |
|
Add: Other income,
net |
|
(329 |
) |
|
|
(240 |
) |
|
|
(227 |
) |
|
|
(569 |
) |
|
|
(468 |
) |
Add: Stock-based
compensation |
|
516 |
|
|
|
493 |
|
|
|
641 |
|
|
|
1,009 |
|
|
|
1,260 |
|
Add: Certain
inventory charges |
|
- |
|
|
|
- |
|
|
|
607 |
|
|
|
- |
|
|
|
528 |
|
Add: Certain
depreciation and amortization charges |
|
228 |
|
|
|
200 |
|
|
|
241 |
|
|
|
428 |
|
|
|
518 |
|
|
Adjusted EBITDA |
$ |
(3,962 |
) |
|
$ |
(4,334 |
) |
|
$ |
(4,225 |
) |
|
$ |
(8,296 |
) |
|
$ |
(9,291 |
) |
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