Nuvectra Corporation (NASDAQ:NVTR), a neurostimulation medical
device company, announced today financial results for the first
quarter ended March 31, 2018.
Highlights
- Reported consolidated revenues of $10.6 million for the first
quarter 2018, including total Algovita® sales of $9.1 million.
- Expanded U.S. commercial team.
- Completed follow-on public offering of common stock for gross
proceeds of approximately $26.0 million in February 2018.
- Completed second amendment to the Company’s existing loan and
security agreement and drew down second tranche for $12.5 million
in February 2018.
Scott Drees, CEO, said, “We have increased our
U.S. Algovita commercial team to 50 active territories and plan to
continue to grow our headcount through 2018 to further expand our
market presence. We expect that these recruiting efforts, together
with the advancement of clinical studies and MRI submissions,
should help drive further penetration in the SCS market. With
respect to our Virtis™ sacral neuromodulation (SNM) system for the
treatment of overactive bladder, we have filed our resubmissions
with both FDA and TUV Süd. Subject to regulatory approvals we look
forward to entering the large, fast-growing, and underserved
European and U.S. SNM markets in 2018.”
First Quarter Financial Results
Total revenue in the first quarter of 2018 was
$10.6 million, a 112% increase from $5.0 million in the first
quarter of 2017. Total Algovita sales were $9.1 million, a 168%
increase from $3.4 million in the first quarter of 2017. Gross
profit in the first quarter of 2018 was $5.8 million, or 55% gross
margin, an increase from $2.6 million, or 52% gross margin, in the
first quarter of 2017.
Operating expenses in the first quarter of 2018
were $15.4 million, a 1.3% increase from $15.2 million in the first
quarter of 2017. The increase reflects investments in the Company’s
sales and marketing team, along with higher headcount offset by a
reduction in R&D expense.
Net loss for the first quarter of 2018 was
$(10.5) million or $(0.84) per share, compared with a net loss of
$(13.1) million, or $(1.27) per share, for the first quarter of
2017.
Total cash and cash equivalents were $53.9
million as of March 31, 2018, which includes total net proceeds of
approximately $23.8 million from the Company’s follow-on common
stock offering and cash proceeds from the draw down of $12.5
million from the Company’s credit facility both completed in
February 2018.
Conference Call Information
Nuvectra will hold a conference call on
Wednesday, May 2, 2018 at 4:30pm ET to discuss the results. The
dial in numbers are (844) 882-7830 for domestic callers and (574)
990-9704 for international callers. The conference ID is
2896392. A live webcast of the conference call will be
available on the investor relations section of the Company’s
website at http://investors.nuvectramed.com/.
A replay of the call will be available starting
on May 2, 2018 through May 9, 2018. To access the replay, dial
(855) 859-2056 for domestic callers and (404) 537-3406 for
international callers and enter access code 2896392. The webcast
will be available in the investor relations section of the
Company’s website for 90 days following the completion of the
call.
About Nuvectra Corporation
Nuvectra™ is a neurostimulation company
committed to helping physicians improve the lives of people with
chronic neurological conditions. The Algovita Spinal Cord
Stimulation (SCS) System is our first commercial offering and is CE
marked and FDA approved for the treatment of chronic pain of the
trunk and/or limbs. Our innovative technology platform also has
capabilities under development to support other neurological
indications such as sacral nerve stimulation (SNS), and deep brain
stimulation (DBS). In addition, our NeuroNexus subsidiary designs,
manufactures and markets leading-edge neural-interface technologies
for the neuroscience clinical research market. Visit the Nuvectra
website at www.nuvectramed.com.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains "forward-looking
statements," including statements we make regarding the outlook
for Nuvectra as an independent publicly-traded company.
Forward-looking statements are based only on our current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions, and therefore they
are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict and may be outside of
our control. Our actual performance may differ materially from
those indicated in the forward-looking statements. Therefore, you
should not rely on any of these forward-looking statements. Any
forward-looking statement made by us is based only on information
currently available to us and speaks only as of the date on which
it is made. Important factors that could cause our actual
results to differ materially from those indicated in the
forward-looking statements include: (i) our ability to successfully
commercialize Algovita and to develop, complete and commercialize
enhancements or improvements to Algovita; (ii) our ability to
successfully compete with our current SCS competitors and the
ability of our U.S. sales representatives to successfully establish
market share and acceptance of Algovita, (iii) the uncertainty of
obtaining regulatory approvals in the United States and Europe for
our Virtis SNS system, (iv) our ability to successfully launch and
commercialize the Virtis SNS system if it receives regulatory
approval (v) our ability to demonstrate the features, perceived
benefits and capabilities of Algovita to physicians and patients in
competition with similar products already well established and sold
in the SCS market; (vi) our ability to anticipate and satisfy
customer needs and preferences and to develop, introduce and
commercialize new products or advancements and improvements to
Algovita in order to successfully meet our customers’ expectations;
(vii) the outcome of our development plans for our neurostimulation
technology platform, including our ability to identify additional
indications or conditions for which we may develop neurostimulation
medical devices or therapies and seek regulatory approval thereof;
(viii) our ability to identify business development and growth
opportunities and to successfully execute on our strategy,
including our ability to seek and develop strategic partnerships
with third parties to, among other things, fund clinical and
development costs for new product offerings; (ix) the performance
by our development partners, including Aleva
Neurotherapeutics, S.A., of their obligations under their
agreements with us; (x) the scope of protection for our
intellectual property rights covering Algovita and other products
using our neurostimulation technology platform, along with any
product enhancements or improvements; (xi) our ability to
successfully build, attract and maintain an effective commercial
infrastructure and qualified sales force in the United States;
(xii) our compliance with all regulatory and legal requirements
regarding implantable medical devices and interactions with
healthcare professionals; (xiii) any product recalls, or the
receipt of any warning letters, mandatory corrections or fines from
any governmental or regulatory agency; and (xiv) our ability to
satisfy the conditions and covenants, including trailing six month
revenue milestones, of our Credit Facility. Please see the
section entitled “Risk Factors” in Nuvectra’s Annual Report on Form
10-K and in our other quarterly and periodic filings for a
description of these and other risks and uncertainties. We
undertake no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
Nuvectra
CorporationCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONSAND COMPREHENSIVE LOSS —
Unaudited(in thousands except per share
data)
|
Three Months Ended |
|
|
March 31, 2018 |
|
March 31, 2017 |
|
Sales: |
|
|
|
|
Product |
$ |
10,118 |
|
$ |
4,588 |
|
Service |
|
456 |
|
|
452 |
|
Total
sales |
|
10,574 |
|
|
5,040 |
|
Cost of sales: |
|
|
|
|
Product |
|
4,454 |
|
|
2,101 |
|
Service |
|
354 |
|
|
310 |
|
Total cost
of sales |
|
4,808 |
|
|
2,411 |
|
Gross
profit |
|
5,766 |
|
|
2,629 |
|
Operating
expenses: |
|
|
|
|
Selling, general
and administrative expenses |
|
12,133 |
|
|
10,805 |
|
Research,
development and engineering costs, net |
|
3,280 |
|
|
4,373 |
|
Total
operating expenses |
|
15,413 |
|
|
15,178 |
|
Operating
loss |
|
(9,647 |
) |
|
(12,549 |
) |
Interest expense,
net |
|
850 |
|
|
370 |
|
Other expense, net |
|
23 |
|
|
203 |
|
Loss before
provision for income taxes |
|
(10,520 |
) |
|
(13,122 |
) |
Provision for income
taxes |
|
13 |
|
|
— |
|
Net
loss |
$ |
(10,533 |
) |
$ |
(13,122 |
) |
Basic and diluted net
loss per share |
$ |
(0.84 |
) |
$ |
(1.27 |
) |
Basic and diluted
weighted average shares outstanding |
|
12,509 |
|
|
10,335 |
|
Nuvectra
CorporationCONDENSED CONSOLIDATED BALANCE
SHEETS—Unaudited(in thousands except share and per
share data)
|
|
As of |
|
|
|
March 31, 2018 |
|
|
December 31,2017 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
53,851 |
|
|
$ |
28,165 |
|
Trade accounts
receivable, net of allowance for doubtful accounts of $417 in 2018
and 2017 |
|
|
9,080 |
|
|
|
10,875 |
|
Inventories |
|
|
4,478 |
|
|
|
4,978 |
|
Prepaid
expenses and other current assets |
|
|
917 |
|
|
|
1,011 |
|
Total current assets |
|
|
68,326 |
|
|
|
45,029 |
|
Property, plant and
equipment, net |
|
|
6,036 |
|
|
|
6,219 |
|
Intangible assets,
net |
|
|
1,353 |
|
|
|
1,428 |
|
Goodwill |
|
|
38,182 |
|
|
|
38,182 |
|
Other long-term
assets |
|
|
109 |
|
|
|
245 |
|
Total assets |
|
$ |
114,006 |
|
|
$ |
91,103 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
3,178 |
|
|
$ |
2,043 |
|
Accrued
liabilities |
|
|
6,438 |
|
|
|
8,827 |
|
Accrued
compensation |
|
|
2,798 |
|
|
|
4,392 |
|
Short-term debt |
|
|
- |
|
|
|
789 |
|
Total current liabilities |
|
|
12,414 |
|
|
|
16,051 |
|
Other long-term
liabilities |
|
|
660 |
|
|
|
993 |
|
Long-term debt,
net |
|
|
38,409 |
|
|
|
25,886 |
|
Total liabilities |
|
|
51,483 |
|
|
|
42,930 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value, 100,000,000 shares authorized; 14,147,446
and 10,849,385 shares issued and outstanding in 2018 and 2017,
respectively |
|
|
14 |
|
|
|
11 |
|
Additional paid-in capital |
|
|
150,878 |
|
|
|
125,999 |
|
Accumulated other comprehensive loss |
|
|
— |
|
|
|
(1 |
) |
Accumulated deficit |
|
|
(88,369 |
) |
|
|
(77,836 |
) |
Total stockholders’ equity |
|
|
62,523 |
|
|
|
48,173 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
114,006 |
|
|
$ |
91,103 |
|
|
Company Contacts:Nuvectra
CorporationWalter Berger, COO & CFO (214)
474-3102wberger@nuvectramed.com
Investor Contacts:The Ruth
GroupTram Bui / Brian Johnston(646) 536-7035 /
7028 investors@nuvectramed.com
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