electroCore, Inc. (Nasdaq: ECOR) (the “Company”), a
commercial-stage bioelectronic medicine and wellness company, today
announced fourth quarter and full year 2022 financial results and
provided an operational update.
Fourth Quarter 2022 and Recent
Highlights
- Reported record full year 2022 net sales of $8.6 million,
representing an increase of 58% over $5.5 million for full
year 2021
- Fourth quarter net sales of $2.6 million, an increase
of 72% over $1.5 million for the fourth quarter of
2021
- Launched two new brands: TAC-STIM™ under the Air
Force BOOST program and Truvaga™ wellness product for stress,
anxiety, and sleep
- Announced distribution agreement with Joerns Healthcare,
LLC
Dan Goldberger, Chief Executive Officer of electroCore,
commented: “This past year we have made great progress advancing
gammaCore and further developing our nVNS technology for various
uses. We reported record sales of $8.6 million for the year
ended December 31, 2022, representing a 58% increase over the
prior year. Additionally, we had a record fourth quarter of $2.6
million in sales. In December 2022, we announced the launch of
Truvaga, our direct-to-consumer wellness product for stress,
anxiety, and sleep, and in April 2022, we announced the launch of
TAC-STIM, our Human Performance initiative in collaboration with
the Air Force Research Laboratory (AFRL). Looking forward, we
are excited about driving awareness to make non-invasive vagus
nerve stimulation technology more accessible to people who can
benefit.”
Fourth Quarter and Full Year 2022 Financial
ResultsFor the quarter ended December 31, 2022,
electroCore reported record net sales of $2.6 million, which
represents a 72% rate of growth compared to
$1.5 million in the same period of 2021. For the full year
of 2022, the Company reported net sales of $8.6 million, which
represents a 58% rate of growth as compared to net sales
of $5.5 million for the full year of 2021. The increase of
$3.1 million is due to an increase in net sales across all major
channels, including the U.S. Department of Veteran Affairs, U.S.
commercial channel, and sales from outside the U.S., which includes
licensing revenue of $139,000.
|
Three months endedDecember
31, |
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Three months endedDecember
31, |
|
|
|
|
|
|
Year endedDecember 31, |
|
Year endedDecember 31, |
|
|
|
|
Channel |
2022 |
|
2021 |
|
% Change |
|
|
2022 |
|
2021 |
|
% Change |
Department of Veteran Affairs (VA) and Department of Defense
(DoD) |
$ |
1,627 |
|
|
$ |
859 |
|
|
|
89 |
% |
|
|
$ |
5,224 |
|
|
$ |
3,261 |
|
|
|
60 |
% |
United States Commercial |
|
504 |
|
|
|
271 |
|
|
|
86 |
% |
|
|
|
1,750 |
|
|
|
679 |
|
|
|
158 |
% |
Outside the United States |
|
384 |
|
|
|
361 |
|
|
|
6 |
% |
|
|
|
1,479 |
|
|
|
1,511 |
|
|
|
-2 |
% |
Licensing Revenue |
|
45 |
|
|
|
— |
|
|
|
N/A |
|
|
|
|
139 |
|
|
|
— |
|
|
|
N/A |
|
|
$ |
2,560 |
|
|
$ |
1,491 |
|
|
|
72 |
% |
|
|
$ |
8,592 |
|
|
$ |
5,451 |
|
|
|
58 |
% |
Gross profit for the fourth quarter of 2022 was
$1.9 million as compared to $1.2 million for the fourth
quarter of 2021. Gross margin for the fourth quarter of 2022 was
75%, as compared to 80% in the fourth quarter of 2021. Gross
profit for the full year of 2022 was $7.0 million
compared to $4.1 million for the full year of 2021. Gross
margin for the full year of 2022 was 81%, as compared to 75%
for the full year of 2021. The fourth quarter of 2022 included a
charge of $217,000 to gross profit related to the change in the
estimated useful life for certain of the Company's licensed
products. Gross margin excluding the change in the estimated
useful life charge would have been 84% for the quarter ended
December 31, 2022.
Total operating expenses in the fourth quarter of 2022 were
$7.8 million as compared to $6.7 million in the fourth quarter
of 2021. Total operating expenses for the full year of 2022
were $29.9 million, as compared to $24.1 million for the full year
of 2021.
Research and development expense in the fourth quarter of 2022
was $1.6 million, as compared to $742,000 for the same period
in 2021. Research and development expenses for the full year
of 2022 were $5.5 million, as compared to $2.5 million
for the full year of 2021. This increase was primarily due to
targeted investments to support the future iterations of our
therapy delivery platform, including the use of our intellectual
property around the delivery of smart phone-integrated and smart
phone-connected non-invasive therapies.
Selling, general and administrative expense in the fourth
quarter of 2022 was $6.2 million, as compared to $5.9 million
for the same period in 2021. Selling, general and administrative
expense for the full year of 2022 was $24.3 million, as
compared to $21.6 million for the full year of 2021. This
increase is primarily due to targeted investments to support our
commercial efforts, particularly around sales and marketing efforts
for our cash pay initiatives.
GAAP net loss in the fourth quarter of 2022 was $5.8 million as
compared to a GAAP net loss of $4.9 million in the fourth quarter
of 2021. GAAP net loss for the full year of 2022 was a loss of
$22.2 million, as compared to a GAAP net loss of $17.2 million for
the full year of 2021.
Adjusted EBITDA net loss in the fourth quarter of 2022 was a
loss of $4.7 million as compared to a loss of $4.4 million in the
fourth quarter of 2021. Adjusted EBITDA net loss for the full year
of 2022 was a loss of $19.0 million, as compared to an
adjusted EBITDA net loss of $15.8 million for the full year
of 2021.
The Company defines adjusted EBITDA net loss as GAAP net loss,
adjusting to exclude non-operating gains/losses, depreciation
and amortization, stock-compensation expense, write-off of right of
use operating lease, inventory reserve charges, legal fees
associated with stockholders’ litigation, and provision/benefit
from income taxes. A reconciliation of GAAP net loss to Non-GAAP
adjusted EBITDA net loss has been provided in the financial
statement tables included in this press release.
Net cash used in operating activities the quarter ended December
31, 2022, was $4.0 million, as compared to $4.4 million in the
fourth quarter of 2021. Net cash used in operating activities for
the full year of 2022 was $16.6 million, as compared to net
cash used of $13.6 million reported in 2021. This increase is
primarily due to the increase in our net loss from operations.
Cash, cash equivalents and restricted cash at December 31, 2022
totaled $18.0 million, as compared to $34.7 million as of December
31, 2021.
Financial GuidanceelectroCore today
introduced the following preliminary unaudited financial guidance
for the first quarter of 2023 and revenue guidance for full-year
2023:
- The Company expects net revenue for the full year 2023 to be in
the range of $14.0 - $15.0 million. The Company believes that its
legacy headache channels will again grow by more than 50% to at
least $12 million in net revenue for the full year and that net
revenue from new products in its Truvaga and TAC-STIM
brands could be more than $2 million for the full year.
- The Company expects net cash usage in the first quarter 2023 to
increase as compared to the fourth quarter of 2022, largely
due to seasonal factors affecting working capital and increased
investment in product evolution.
Webcast and Conference Call
InformationelectroCore’s management team will host a
conference call today, March 8, 2023, beginning at 4:30 pm
EST. Investors interested in listening to the conference call
or webcast may do so by dialing 877-269-7756 for domestic callers
or 201-689-7817 for international callers, using conference ID:
13736452, or click through the following
link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=bHYAWnTU.
An archived webcast of the event will be available on the
“Investors” section of the Company’s website at:
www.electrocore.com.
About electroCore, Inc.electroCore, Inc. is a
commercial stage bioelectronic medicine and wellness company
dedicated to improving health through its non-invasive vagus nerve
stimulation (“nVNS”) technology platform. Our focus is the
commercialization of medical devices for the management and
treatment of certain medical conditions and consumer product
offerings utilizing nVNS to promote general wellbeing and human
performance in the United States and select overseas markets.
For more information, visit www.electrocore.com.
Forward-Looking StatementsThis press release
and other written and oral statements made by representatives of
electroCore may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements include, but are not limited to,
statements about electroCore’s business prospects and clinical and
product development plans; its pipeline or potential markets for
its technologies; the timing, outcome and impact of regulatory,
clinical and commercial developments; business prospects around new
and potential products, including those for human performance and
wellness, financial guidance for the first quarter of 2023 and
revenue guidance for the full-year of 2023, and other statements
that are not historical in nature, particularly those that utilize
terminology such as "anticipates," "will," "expects," "believes,"
"intends," and other words of similar meaning, derivations of such
words and the use of future dates. Actual results could differ from
those projected in any forward-looking statements due to numerous
factors. Such factors include, among others, the ability to raise
the additional funding needed to continue to pursue electroCore’s
business and product development plans, the inherent uncertainties
associated with developing new products or technologies, the
ability to commercialize gammaCore™, TAC-STIM™, and Truvaga™, the
potential impact and effects of COVID-19 on the business of
electroCore, electroCore’s results of operations and financial
performance, inflation and currency fluctuations, and any measures
electroCore has and may take in response to COVID-19 and any
expectations electroCore may have with respect thereto, competition
in the industry in which electroCore operates and overall economic
and market conditions. Any forward-looking statements are made as
of the date of this press release, and electroCore assumes no
obligation to update the forward-looking statements or to update
the reasons why actual results could differ from those projected in
the forward-looking statements, except as required by law.
Investors should consult all of the information set forth herein
and should also refer to the risk factor disclosure set forth in
the reports and other documents electroCore files with the SEC
available at www.sec.gov.
Investors:Rich CockrellCG
Capital404-736-3838ecor@cg.capital
|
electroCore, Inc.Consolidated Statements
of Operations(Unaudited)(in thousands, except per share
data) |
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net sales |
|
$ |
2,560 |
|
|
$ |
1,491 |
|
|
$ |
8,592 |
|
|
$ |
5,451 |
|
Cost of goods sold |
|
|
640 |
|
|
|
292 |
|
|
|
1,616 |
|
|
|
1,385 |
|
Gross profit |
|
|
1,920 |
|
|
|
1,199 |
|
|
|
6,976 |
|
|
|
4,066 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1,628 |
|
|
|
742 |
|
|
|
5,520 |
|
|
|
2,536 |
|
Selling, general and administrative |
|
|
6,209 |
|
|
|
5,929 |
|
|
|
24,330 |
|
|
|
21,573 |
|
Total operating expenses |
|
|
7,837 |
|
|
|
6,671 |
|
|
|
29,850 |
|
|
|
24,109 |
|
Loss from operations |
|
|
(5,917 |
) |
|
|
(5,472 |
) |
|
|
(22,874 |
) |
|
|
(20,043 |
) |
Other (income) expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,422 |
) |
Gain on termination of joint venture |
|
|
— |
|
|
|
(549 |
) |
|
|
— |
|
|
|
(549 |
) |
Interest and other income |
|
|
(142 |
) |
|
|
(3 |
) |
|
|
(287 |
) |
|
|
(11 |
) |
Other expense |
|
|
1 |
|
|
|
1 |
|
|
|
6 |
|
|
|
8 |
|
Total other (income)
expense |
|
|
(141 |
) |
|
|
(551 |
) |
|
|
(281 |
) |
|
|
(1,974 |
) |
Loss before income taxes |
|
|
(5,776 |
) |
|
|
(4,921 |
) |
|
|
(22,593 |
) |
|
|
(18,069 |
) |
(Provision) benefit from
income taxes |
|
|
(14 |
) |
|
|
(26 |
) |
|
|
431 |
|
|
|
851 |
|
Net loss |
|
$ |
(5,790 |
) |
|
$ |
(4,947 |
) |
|
$ |
(22,162 |
) |
|
$ |
(17,218 |
) |
Net loss per share of common
stock - Basic and Diluted |
|
$ |
(1.22 |
) |
|
$ |
(1.05 |
) |
|
$ |
(4.69 |
) |
|
$ |
(4.36 |
) |
Weighted average number of
common shares outstanding - Basic and Diluted |
|
|
4,744 |
|
|
|
4,711 |
|
|
|
4,729 |
|
|
|
3,945 |
|
All common stock share and per share data
reflects the reverse stock split effective February 15,
2023.
|
electroCore, Inc.Consolidated Balance
Sheet Information(Unaudited)(in thousands) |
|
|
|
|
|
|
|
December 31, 2022 |
|
December 31, 2021 |
Cash and cash equivalents |
|
$ |
17,712 |
|
|
$ |
34,689 |
|
Restricted cash |
|
$ |
250 |
|
|
$ |
— |
|
Total assets |
|
$ |
24,756 |
|
|
$ |
42,833 |
|
Current liabilities |
|
$ |
7,045 |
|
|
$ |
5,485 |
|
Total liabilities |
|
$ |
7,670 |
|
|
$ |
6,185 |
|
Total equity |
|
$ |
17,086 |
|
|
$ |
36,648 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) Use of Non-GAAP Financial
Measure
The Company is presenting adjusted EBITDA net loss because it
believes this measure is a useful indicator of its operating
performance. electroCore management uses this non-GAAP measure
principally as a measure of the Company’s core operating
performance and believes that this measure is useful to investors
because it is frequently used by the financial community,
investors, and other interested parties to evaluate companies in
the Company’s industry. The Company also believes that this measure
is useful to its management and investors as a measure of
comparative operating performance from period to period.
Additionally, the Company believes its use of non-GAAP adjusted
EBITDA net loss from operations facilitates management’s internal
comparisons to historical operating results by factoring out
potential differences caused by gains and charges not related to
its regular, ongoing business, including, without limitation,
non-cash charges and certain large and unpredictable charges such
as restructuring expenses.
The Company defines adjusted EBITDA net loss as GAAP net loss,
adjusting to exclude non-operating gains/losses, depreciation
and amortization, stock-compensation expense, write-off of right of
use operating lease, inventory reserve charges, legal fees
associated with stockholders’ litigation, and provision/benefit
from income taxes. A reconciliation of GAAP net loss to Non-GAAP
adjusted EBITDA net loss is provided in the financial statement
table below.
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
(in
thousands) |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
GAAP net loss |
|
$ |
(5,790 |
) |
|
$ |
(4,947 |
) |
|
$ |
(22,162 |
) |
|
$ |
(17,218 |
) |
Depreciation and
amortization |
|
|
148 |
|
|
|
95 |
|
|
|
548 |
|
|
|
382 |
|
Stock-based compensation |
|
|
587 |
|
|
|
761 |
|
|
|
2,682 |
|
|
|
3,302 |
|
Inventory reserve charge |
|
|
217 |
|
|
|
70 |
|
|
|
217 |
|
|
|
70 |
|
Gain on extinguishment of
debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,422 |
) |
Gain on termination of joint
venture |
|
|
— |
|
|
|
(549 |
) |
|
|
— |
|
|
|
(549 |
) |
Gain on lease settlement |
|
|
— |
|
|
|
(57 |
) |
|
|
— |
|
|
|
(57 |
) |
Legal fees associated with
stockholders’ litigation |
|
|
251 |
|
|
|
187 |
|
|
|
400 |
|
|
|
581 |
|
Interest and other income /
expense |
|
|
(141 |
) |
|
|
(2 |
) |
|
|
(281 |
) |
|
|
(3 |
) |
Provision (benefit) from
income taxes |
|
|
14 |
|
|
|
26 |
|
|
|
(431 |
) |
|
|
(851 |
) |
Adjusted EBITDA net
loss |
|
$ |
(4,714 |
) |
|
$ |
(4,416 |
) |
|
$ |
(19,027 |
) |
|
$ |
(15,765 |
) |
The Company’s use of a non-GAAP measure has limitations as an
analytical tool, and you should not consider it in isolation or as
a substitute for analysis of its results as reported under GAAP.
Some of these limitations are: (i) the non-GAAP measure does not
reflect interest or tax payments that may represent a reduction in
cash available; (ii) although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized may
have to be replaced in the future, and the non-GAAP measure does
not reflect cash capital expenditure requirements for such
replacements or for new capital expenditure requirements; (iii) the
non-GAAP measure does not reflect the potentially dilutive impact
of equity-based compensation; and (iv) the non-GAAP measure does
not reflect changes in, or cash requirements for working capital
needs; other companies, including companies in electroCore’s
industry, may calculate adjusted EBITDA net loss differently,
effectively reducing its usefulness as a comparative measure.
Because of these and other limitations, you should consider the
non-GAAP measure together with other GAAP-based financial
performance measures, including various cash flow metrics, net
loss, and other GAAP results. A reconciliation of GAAP net loss to
non-GAAP adjusted EBITDA net loss has been provided in the
preceding financial statements table of this press release.
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