REDWOOD CITY, Calif.,
Feb. 25, 2020 /PRNewswire/
-- Nevro Corp. (NYSE: NVRO), a global medical device
company that is providing innovative, evidence-based solutions for
the treatment of chronic pain, today announced its financial
results for the fourth quarter and full year ended December 31, 2019.
Fourth Quarter 2019
Worldwide revenue for the fourth
quarter 2019 was $114.4 million, a 6%
increase compared to $107.9 million
in the prior year period. U.S. revenue was $97.9 million, a 7% increase compared to
$91.6 million in the prior year
period. Year-over-year U.S. trial growth was 17% and
permanent implant growth was 20% during the fourth quarter of
2019. International revenue was $16.5
million, a 1% increase as-reported, or 3% on a constant
currency basis, compared to $16.3
million in the prior year period.
"Beginning in the second quarter, we started driving quite a few
changes to our commercial strategies and execution, and we quickly
saw patient trials and permanent implants return to growth," said
D. Keith Grossman, Chairman, CEO and
President of Nevro. "More recently, we launched Senza Omnia
commercially in the U.S., which allowed us to engage more
constructively with our customers and offer them the only SCS
platform that can provide the unique advantages of HF10 as well as
the full range of SCS frequencies. Just last month, we
presented encouraging three-month data from our Senza-PDN study,
which was the largest SCS RCT conducted to date. I am pleased
with the progress we made in 2019 and am excited by the momentum we
are building in the market and the opportunity ahead of us in
2020."
Gross profit for the fourth quarter of 2019 was $81.3 million, a 7% increase compared to
$76.2 million in the prior year
period. Gross margin was 71.0% in the fourth quarter of 2019
compared to 70.5% in the prior year period.
Operating expenses for the fourth quarter of 2019 were
$92.9 million, a 10% increase
compared to $84.8 million in the
prior year period. The year-over-year increase in operating
expenses was primarily driven by U.S. sales and marketing personnel
costs, including $2 million in
structural changes in the commercial organization, and
approximately $3 million in costs
related to the Company's ongoing clinical trials. Legal
expenses associated with patent litigation were $1.7 million for the fourth quarter of 2019,
which was consistent with the prior year period.
Net loss from operations for the fourth quarter of 2019 was
$11.7 million, a 36% increase
compared to a loss of $8.6 million in
the prior year period. Adjusted EBITDA for the fourth quarter
of 2019 was $1.5 million, a 57%
decrease compared to $3.5 million in
the prior year period. Adjusted EBITDA excludes certain
litigation expenses, interest, taxes and non-cash items such as
stock-based compensation and depreciation and amortization.
Please see financial tables for GAAP to Non-GAAP
reconciliations.
Cash, cash equivalents and short-term investments totaled
$237.8 million as of December 31, 2019. Net cash increased
during the fourth quarter of 2019 by $5.0
million and decreased by $26.7
million for the full year 2019.
Full Year 2019
Worldwide revenue for the full year
2019 was $390.3 million, a 1%
increase compared to $387.3 million
in the prior year period. U.S. revenue for the full year 2019 was
$326.0 million, a 1% increase
compared to $321.8 million in the
prior year period. International revenue was $64.3 million, a 2% decrease as-reported, or a 4%
increase on a constant currency basis, compared to $65.5 million in the prior year period.
Please see financial statements for additional full year 2019
results and GAAP to Non-GAAP reconciliations.
2020 Financial Guidance
Nevro reiterated its full year
2020 worldwide revenue to be in the range of $435 to $440
million. In addition, the Company provided additional
full year 2020 guidance as follows: Gross margin is expected
to be in the range of 69% to 70% and operating expenses are
expected to be approximately $355
million, including litigation expenses. To assist
investors in understanding Nevro's underlying business trends, the
Company is also introducing adjusted EBITDA guidance of positive
$3.0 to $10.0
million for the full year 2020, which compares to a loss of
$40.3 million in 2019. Adjusted
EBITDA excludes certain litigation expenses, interest, taxes and
non-cash items such as stock-based compensation and depreciation
and amortization. Please see financial tables for GAAP to
Non-GAAP reconciliations.
Webcast and Conference Call Information
Management
will host a conference call today beginning at 1:30 p.m. PT / 4:30 p.m.
ET. Investors interested in listening to the
conference call may do so by dialing (833) 286-5807 in the U.S. or
(647) 689-4452 internationally, using Conference ID: 1864387.
In addition, a live webcast will be available on the "Investors"
section of the Company's website at www.nevro.com, as well as an
archived recording.
About Nevro
Headquartered in Redwood City, California, Nevro is a global
medical device company focused on providing innovative products
that improve the quality of life of patients suffering from
debilitating chronic pain. Nevro has developed and
commercialized the Senza spinal cord stimulation (SCS) system, an
evidence-based, non-pharmacologic neuromodulation platform for the
treatment of chronic pain. HF10 therapy has demonstrated the
ability to reduce or eliminate opioids in ≥65% of patients across
six peer-reviewed clinical studies. The Senza®
System, Senza II™ System, and the Senza® Omnia™
System are the only SCS systems that deliver Nevro's
proprietary HF10® therapy. Senza, Senza II, Senza Omnia,
HF10, Nevro and the Nevro logo are trademarks of Nevro Corp.
To learn more about Nevro, connect with us on LinkedIn, Twitter,
Facebook and Instagram.
Forward-Looking Statements
In addition to historical
information, this press release contains forward-looking statements
reflecting the current beliefs and expectations of management made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including the Company's expectations
for its worldwide revenue, gross margin and adjusted EBITDA for the
full year 2020, as well as its expectations for growth in patient
trials and permanent implants. These forward-looking
statements are based upon information that is currently available
to us or our current expectations, speak only as of the date
hereof, and are subject to numerous risks and uncertainties,
including our ability to successfully commercialize our products;
our ability to manufacture our products to meet demand; the level
and availability of third-party payor reimbursement for our
products; our ability to effectively manage our anticipated growth
and the costs and expenses of operating our business; our ability
to protect our intellectual property rights and proprietary
technologies; our ability to operate our business without
infringing the intellectual property rights and proprietary
technology of third parties; competition in our industry;
additional capital and credit availability; our ability to attract
and retain qualified personnel; and product liability claims.
These factors, together with those that are described in
greater detail in our Annual Report on Form 10-K filed on
February 25, 2020, as well as any
reports that we may file with the Securities and Exchange
Commission in the future, may cause our actual results, performance
or achievements to differ materially and adversely from those
anticipated or implied by our forward-looking statements. We
expressly disclaim any obligation, except as required by law, or
undertaking to update or revise any such forward-looking
statements. Nevro's operating results for the fourth quarter
and full year ended December 31, 2019
are not necessarily indicative of our operating results for any
future periods.
Investor Relations:
Juliet
Cunningham
Vice President, Investor Relations
+1 650-433-3247
ir@nevro.com
Nevro
Corp.
Consolidated
Statements of Operations and Comprehensive Loss
(in thousands,
except share and per share data)
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
114,374
|
|
|
$
|
107,944
|
|
|
$
|
390,255
|
|
|
$
|
387,289
|
|
Cost of
revenue
|
|
|
33,116
|
|
|
|
31,790
|
|
|
|
121,905
|
|
|
|
113,965
|
|
Gross
profit
|
|
|
81,258
|
|
|
|
76,154
|
|
|
|
268,350
|
|
|
|
273,324
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
16,933
|
|
|
|
13,480
|
|
|
|
59,017
|
|
|
|
48,459
|
|
Sales, general and
administrative
|
|
|
76,006
|
|
|
|
71,277
|
|
|
|
305,812
|
|
|
|
266,608
|
|
Total operating
expenses
|
|
|
92,939
|
|
|
|
84,757
|
|
|
|
364,829
|
|
|
|
315,067
|
|
Loss from
operations
|
|
|
(11,681)
|
|
|
|
(8,603)
|
|
|
|
(96,479)
|
|
|
|
(41,743)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
|
(1,399)
|
|
|
|
(1,194)
|
|
|
|
(4,911)
|
|
|
|
(5,530)
|
|
Other income
(expense), net
|
|
|
(181)
|
|
|
|
(319)
|
|
|
|
(697)
|
|
|
|
(1,164)
|
|
Loss before income
taxes
|
|
|
(13,261)
|
|
|
|
(10,116)
|
|
|
|
(102,087)
|
|
|
|
(48,437)
|
|
Provision for
(benefit from) income taxes
|
|
|
481
|
|
|
|
(509)
|
|
|
|
1,599
|
|
|
|
768
|
|
Net loss
|
|
|
(13,742)
|
|
|
|
(9,607)
|
|
|
|
(103,686)
|
|
|
|
(49,205)
|
|
Changes in foreign
currency translation adjustment
|
|
|
350
|
|
|
|
(141)
|
|
|
|
449
|
|
|
|
(37)
|
|
Changes in gains
(losses) on short-term investments
|
|
|
(125)
|
|
|
|
11
|
|
|
|
315
|
|
|
|
202
|
|
Net change in other
comprehensive loss
|
|
|
225
|
|
|
|
(130)
|
|
|
|
764
|
|
|
|
165
|
|
Comprehensive
Loss
|
|
$
|
(13,517)
|
|
|
$
|
(9,737)
|
|
|
$
|
(102,922)
|
|
|
$
|
(49,040)
|
|
Net loss per share,
basic and diluted
|
|
$
|
(0.44)
|
|
|
$
|
(0.32)
|
|
|
$
|
(3.37)
|
|
|
$
|
(1.64)
|
|
Weighted average
shares used to compute net loss
per share, basic and diluted
|
|
|
31,233,416
|
|
|
|
30,214,454
|
|
|
|
30,803,872
|
|
|
|
30,051,961
|
|
Nevro
Corp.
Consolidated
Balance Sheets
(in thousands,
except share and per share data)
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
65,373
|
|
|
$
|
51,266
|
|
Short-term
investments
|
|
|
172,429
|
|
|
|
213,281
|
|
Accounts receivable,
net
|
|
|
82,833
|
|
|
|
80,656
|
|
Inventories,
net
|
|
|
91,579
|
|
|
|
92,035
|
|
Prepaid expenses and
other current assets
|
|
|
9,838
|
|
|
|
6,621
|
|
Total current
assets
|
|
|
422,052
|
|
|
|
443,859
|
|
Property and
equipment, net
|
|
|
11,766
|
|
|
|
12,801
|
|
Operating lease
assets
|
|
|
21,533
|
|
|
|
—
|
|
Other
assets
|
|
|
13,338
|
|
|
|
5,850
|
|
Restricted
cash
|
|
|
956
|
|
|
|
606
|
|
Total
assets
|
|
$
|
469,645
|
|
|
$
|
463,116
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
16,048
|
|
|
$
|
23,505
|
|
Accrued liabilities
and other
|
|
|
54,563
|
|
|
|
38,909
|
|
Total current
liabilities
|
|
|
70,611
|
|
|
|
62,414
|
|
Long-term
debt
|
|
|
160,300
|
|
|
|
152,394
|
|
Long-term operating
lease liabilities
|
|
|
20,445
|
|
|
|
—
|
|
Other long-term
liabilities
|
|
|
1,937
|
|
|
|
2,825
|
|
Total
liabilities
|
|
|
253,293
|
|
|
|
217,633
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Common stock, $0.001
par value, 290,000,000 shares authorized, 31,544,361 and 30,263,536 shares issued and
outstanding at December 31, 2019
and 2018, respectively
|
|
|
32
|
|
|
|
30
|
|
Additional paid-in
capital
|
|
|
626,401
|
|
|
|
552,612
|
|
Accumulated other
comprehensive loss
|
|
|
(313)
|
|
|
|
(1,077)
|
|
Accumulated
deficit
|
|
|
(409,768)
|
|
|
|
(306,082)
|
|
Total stockholders'
equity
|
|
|
216,352
|
|
|
|
245,483
|
|
Total liabilities and
stockholders' equity
|
|
$
|
469,645
|
|
|
$
|
463,116
|
|
Nevro
Corp.
GAAP to Adjusted
EBIDTA Reconciliation
(unaudited)
(in
thousands)
|
|
The following table
presents a reconciliation of GAAP net loss, as prepared in
accordance with U.S. Generally Accepted Accounting Principles
("GAAP"), to Adjusted EBITDA, a non-GAAP financial
measure.
|
|
Reconciliation of
actual results:
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
(unaudited)
|
|
|
|
|
GAAP Net
loss
|
|
$
|
(13,742)
|
|
|
$
|
(9,607)
|
|
|
$
|
(103,686)
|
|
|
$
|
(49,205)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
expense, net
|
|
|
1,399
|
|
|
|
1,194
|
|
|
|
4,911
|
|
|
|
5,530
|
|
Provision for income
taxes
|
|
|
481
|
|
|
|
(509)
|
|
|
|
1,599
|
|
|
|
768
|
|
Depreciation and
amortization
|
|
|
1,298
|
|
|
|
1,082
|
|
|
|
4,726
|
|
|
|
4,050
|
|
Stock-based
compensation expense
|
|
|
10,377
|
|
|
|
9,619
|
|
|
|
41,697
|
|
|
|
36,637
|
|
Litigation related
expenses
|
|
|
1,701
|
|
|
|
1,711
|
|
|
|
10,432
|
|
|
|
20,219
|
|
Adjusted
EBIDTA
|
|
$
|
1,514
|
|
|
$
|
3,490
|
|
|
$
|
(40,321)
|
|
|
$
|
17,999
|
|
Reconciliation of
guidance:
|
|
|
Year
Ended
|
|
|
|
December 31,
2020
|
|
|
|
(Low Case)
|
|
|
(High
Case)
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
|
$
|
(62,200)
|
|
|
$
|
(55,200)
|
|
Non-GAAP
Adjustments
|
|
|
65,200
|
|
|
|
65,200
|
|
Adjusted
EBIDTA
|
|
$
|
3,000
|
|
|
$
|
10,000
|
|
Management uses certain non-GAAP financial measures, most
specifically Adjusted EBITDA, as a supplement to GAAP financial
measures to further evaluate the Company's operating performance
period over period, analyze the underlying business trends, assess
performance relative to competitors and establish operational
objectives.
Management believes it is important to provide investors with
the same non-GAAP metrics it uses to evaluate the performance and
underlying trends of the Company's business operations to
facilitate comparisons to its historical operating results and
evaluate the effectiveness of its operating strategies. Disclosure
of these non-GAAP financial measures also facilitates comparisons
of the Company's underlying operating performance with
other companies in the industry that also supplement their GAAP
results with non-GAAP financial measures.
EBIDTA is a non-GAAP financial measure, which is calculated by
adding interest income and expense, net; provision for income
taxes; and depreciation and amortization to net income. In
calculating Adjusted EBIDTA, the Company further adjusts for the
following items:
Stock-based compensation expense – The Company excludes non-cash
costs related to the Company's stock-based plans, which include
stock options, restricted stock units and performance-based
restricted stock units as these expenses do not require cash
settlement from the Company.
Litigation related expenses – The Company excludes legal and
professional fees associated with certain legal matters which
management considers not related to the underlying operating
performance of the business.
Full year guidance excludes the impact of foreign currency
fluctuations.
The non-GAAP financial measure should not be considered in
isolation from, or as a replacement for, the most directly
comparable GAAP financial measures, as it is not prepared in
accordance with U.S. GAAP.
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SOURCE Nevro Corp.