Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the
“Company”), a commercial-stage medical device company that develops
and markets customizable, incision-free therapies for the ablation
of diseased tissue, today reported financial results for the second
quarter ended June 30, 2023. Unless specified otherwise, all
amounts in this press release are expressed in U.S. dollars and are
presented in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board
applicable to the preparation of interim condensed consolidated
financial statements, including International Accounting Standards
34, Interim Financial Reporting.
“This quarter was highlighted by the American
Medical Association’s establishment of three new Current Procedural
Terminology, or CPT®, Category 1 codes specific to the TULSA
procedure, which is a critical milestone for the broader adoption
of the technology to treat prostate diseases in the United States,”
said Arun Menawat, Profound’s CEO and Chairman. “In addition, we
saw a 38% increase in recurring revenue over Q2-2022, marking the
fifth consecutive quarter of recurring revenue growth. For the
remainder of 2023, we expect to see an increased pace of U.S. TULSA
adoption, driven by a continuing, if not accelerating, trend of
recurring revenue growth, as well as the addition of several new
sites to our installed base of TULSA-PRO® systems.”
Summary Second Quarter 2023
Results
For the quarter ended June 30, 2023, the Company
recorded revenue of approximately $1.6 million, with the full
amount coming from recurring revenue, which consists of the sale of
TULSA-PRO® consumables, lease of medical devices, procedures and
services associated with extended warranties. This compares to
revenue of approximately $2.0 million in the same three-month
period a year ago, which included $1.2 million in recurring revenue
and $864,000 from the one-time sale of capital equipment in
international markets.
Total operating expenses, which consist of
research and development (“R&D”), general and administrative
(“G&A”), and selling and distribution (“S&D”) expenses,
were approximately $7.5 million in the second quarter of 2023, a
14% decrease from approximately $8.7 million in the second quarter
of 2022.
Expenditures for R&D for the three months
ended June 30, 2023 were approximately $3.2 million, a decrease of
14% compared with approximately $3.7 million in the three months
ended June 30, 2022, primarily due to: lower headcount and
reimbursement of workforce costs associated with a research
project; a decrease in share based compensation due to fewer awards
granted for employees; decreases in other expenses because of lower
office supplies purchased; and lower amortization expenses due to
intangible assets associated with the Sonalleve® brand and
technology being fully amortized. Partially offsetting these
amounts was an increase in clinical trial costs associated with the
CAPTAIN trial treatments and recruitment efforts.
G&A expenses for the 2023 second quarter
decreased by 21% to approximately $2.1 million, compared with
approximately $2.6 million in the same period in 2022, due
primarily to lower salaries and benefits, decreased software
expenses, and decreased license costs for enterprise resource
planning and customer relationship management software. These were
partially offset by increased insurance costs.
Second quarter 2023 S&D expenses decreased
by 6% to approximately $2.3 million, compared with $2.4 million in
the second quarter of 2022. This was driven lower salaries,
benefits and share based compensation. Partially offsetting these
amounts was an increase in consulting fees, marketing, travel and
other expenses due to increased in-person conferences, customer
meetings, release of patient videos, marketing materials and
overall increase to general expenses.
Net finance costs for the three months ended
June 30, 2023 were approximately $884,000, compared with
approximate net finance income of $1.9 million in the three months
ended June 30, 2022.
Second quarter 2023 net loss was approximately
$7.4 million, or $0.35 per common share, compared to approximately
$5.9 million, or $0.28 per common share, in the three months ended
June 30, 2022.
Liquidity and Outstanding Share
Capital
As at June 30, 2023, Profound had cash of
approximately $39.3 million.
As at August 9, 2023, Profound had 21,260,595
common shares issued and outstanding.
For complete financial results, please see
Profound’s filings at www.sedar.com, www.sec.gov and on the
Company’s website at www.profoundmedical.com under “Financial” in
the Investors section.
Conference Call Details
Profound Medical is pleased to invite all
interested parties to participate in a conference call today at
4:30 pm ET during which time the results will be discussed.
To participate in the conference call by telephone, please
pre-register via this link to receive the dial-in number and your
unique PIN.
The call will also be broadcast live and
archived on the Company’s website at www.profoundmedical.com under
“Webcasts” in the Investors section.
About Profound Medical
Corp.
Profound is a commercial-stage medical device
company that develops and markets customizable, incision-free
therapies for the ablation of diseased tissue.
Profound is commercializing TULSA-PRO®, a
technology that combines real-time MRI, robotically-driven
transurethral ultrasound and closed-loop temperature feedback
control. TULSA-PRO® is designed to provide customizable and
predictable radiation-free ablation of a surgeon-defined prostate
volume while actively protecting the urethra and rectum to help
preserve the patient’s natural functional abilities. TULSA-PRO® has
the potential to be a flexible technology in customizable prostate
ablation, including intermediate stage cancer, localized
radio-recurrent cancer, retention and hematuria palliation in
locally advanced prostate cancer, and the transition zone in large
volume benign prostatic hyperplasia (“BPH”). TULSA-PRO® is CE
marked, Health Canada approved, and 510(k) cleared by the U.S. Food
and Drug Administration (“FDA”).
Profound is also commercializing Sonalleve®, an
innovative therapeutic platform that is CE marked for the treatment
of uterine fibroids and palliative pain treatment of bone
metastases. Sonalleve® has also been approved by the China National
Medical Products Administration for the non-invasive treatment of
uterine fibroids and has FDA approval under a Humanitarian Device
Exemption for the treatment of osteoid osteoma. The Company is in
the early stages of exploring additional potential treatment
markets for Sonalleve® where the technology has been shown to have
clinical application, such as non-invasive ablation of abdominal
cancers and hyperthermia for cancer therapy.
Forward-Looking Statements
This release includes forward-looking statements
regarding Profound and its business which may include, but is not
limited to, the expectations regarding the efficacy of Profound’s
technology in the treatment of prostate cancer, BPH, uterine
fibroids, palliative pain treatment and osteoid osteoma. Often, but
not always, forward-looking statements can be identified by the use
of words such “plans”, “is expected”, “expects”, “scheduled”,
“intends”, “contemplates”, “anticipates”, “believes”, “proposes” or
variations (including negative variations) of such words and
phrases, or state that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved.
Such statements are based on the current expectations of the
management of Profound. The forward-looking events and
circumstances discussed in this release, may not occur by certain
specified dates or at all and could differ materially as a result
of known and unknown risk factors and uncertainties affecting the
Company, including risks regarding the medical device industry,
regulatory approvals, reimbursement, economic factors, the equity
markets generally and risks associated with growth and competition.
Although Profound has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. No forward-looking
statement can be guaranteed. In addition, there is uncertainty
about the spread of the COVID-19 virus and the impact it will have
on Profound’s operations, the demand for its products, global
supply chains and economic activity in general. Except as required
by applicable securities laws, forward-looking statements speak
only as of the date on which they are made and Profound undertakes
no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise, other than as required by law.
For further information, please
contact:
Stephen KilmerInvestor
Relationsskilmer@profoundmedical.com T: 647.872.4849
Profound Medical Corp.Interim
Condensed Consolidated Balance SheetsIn USD
(000s)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
June
30,2023$ |
|
|
December
31,2022$ |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Cash |
|
39,275 |
|
|
46,517 |
|
Trade and other receivables |
|
6,586 |
|
|
6,344 |
|
Inventory |
|
8,056 |
|
|
7,941 |
|
Prepaid expenses and deposits |
|
776 |
|
|
1,222 |
|
Total current assets |
|
54,693 |
|
|
62,024 |
|
|
|
|
|
|
Property and equipment |
|
795 |
|
|
899 |
|
Intangible assets |
|
592 |
|
|
680 |
|
Right-of-use assets |
|
726 |
|
|
818 |
|
|
|
|
|
|
Total assets |
|
56,806 |
|
|
64,421 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
2,424 |
|
|
2,091 |
|
Deferred revenue |
|
652 |
|
|
471 |
|
Long-term debt |
|
7,329 |
|
|
523 |
|
Derivative financial instrument |
|
- |
|
|
563 |
|
Lease liabilities |
|
252 |
|
|
239 |
|
Income taxes payable |
|
321 |
|
|
298 |
|
Total current liabilities |
|
10,978 |
|
|
4,185 |
|
|
|
|
|
|
Long-term debt |
|
- |
|
|
6,651 |
|
Deferred revenue |
|
754 |
|
|
764 |
|
Lease liabilities |
|
708 |
|
|
817 |
|
|
|
|
|
|
Total liabilities |
|
12,440 |
|
|
12,417 |
|
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
Share capital |
|
216,092 |
|
|
205,825 |
|
Contributed surplus |
|
19,059 |
|
|
18,704 |
|
Accumulated other comprehensive income |
|
12,673 |
|
|
16,837 |
|
Deficit |
|
(203,458 |
) |
|
(189,362 |
) |
|
|
|
|
|
Total Shareholders’ Equity |
|
44,366 |
|
|
52,004 |
|
|
|
|
|
|
Total Liabilities and Shareholders’ Equity |
|
56,806 |
|
|
64,421 |
|
|
|
|
|
|
|
|
Profound Medical Corp.Interim
Condensed Consolidated Statements of Loss and Comprehensive
Loss/IncomeIn USD
(000s)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threemonths
ended June
30,2023$ |
|
Threemonths
ended June
30,2022$ |
|
SixmonthsendedJune
30,2023$ |
|
SixmonthsendedJune
30,2022$ |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Recurring - non-capital |
|
1,602 |
|
1,161 |
|
|
3,069 |
|
2,185 |
|
Capital equipment |
|
- |
|
864 |
|
|
393 |
|
1,204 |
|
|
|
1,602 |
|
2,025 |
|
|
3,462 |
|
3,389 |
|
Cost of sales |
|
552 |
|
1,089 |
|
|
1,199 |
|
2,017 |
|
Gross profit |
|
1,050 |
|
936 |
|
|
2,263 |
|
1,372 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Research and development |
|
3,155 |
|
3,688 |
|
|
6,995 |
|
6,868 |
|
General and administrative |
|
2,080 |
|
2,632 |
|
|
4,186 |
|
4,978 |
|
Selling and distribution |
|
2,251 |
|
2,394 |
|
|
4,356 |
|
4,596 |
|
Total operating expenses |
|
7,486 |
|
8,714 |
|
|
15,537 |
|
16,442 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
6,436 |
|
7,778 |
|
|
13,274 |
|
15,070 |
|
|
|
|
|
|
|
|
|
|
Net finance costs/(income) |
|
884 |
|
(1,864 |
) |
|
739 |
|
(972 |
) |
|
|
|
|
|
|
|
|
|
Loss before taxes |
|
7,320 |
|
5,914 |
|
|
14,013 |
|
14,098 |
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
35 |
|
16 |
|
|
83 |
|
47 |
|
|
|
|
|
|
|
|
|
|
Net loss attributed to shareholders for the
period |
|
7,355 |
|
5,930 |
|
|
14,096 |
|
14,145 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive (income) loss |
|
|
|
|
|
|
|
|
Item that may be reclassified to loss |
|
|
|
|
|
|
|
|
Foreign currency translation adjustment- net of tax |
|
4,117 |
|
(6,181 |
) |
|
4,164 |
|
(3,888 |
) |
Net loss and comprehensive loss/(income) for the
period |
|
11,472 |
|
(251 |
) |
|
18,260 |
|
10,257 |
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
Basic and diluted loss per common share |
|
0.35 |
|
0.28 |
|
|
0.67 |
|
0.68 |
|
|
|
|
|
|
|
|
|
|
|
|
Profound Medical Corp.Interim
Condensed Consolidated Statements of Cash FlowsIn
USD (000s)(Unaudited)
|
|
|
|
|
|
|
Six monthsended June 30,
2023$ |
|
Six monthsended June 30,
2022$ |
|
|
|
|
|
Operating activities |
|
|
|
Net loss for the period |
(14,096 |
) |
(14,145 |
) |
Adjustments to reconcile net loss to net cash flows from operating
activities: |
|
|
Depreciation of property and equipment |
351 |
|
327 |
|
Amortization of intangible assets |
101 |
|
531 |
|
Depreciation of right-of-use assets |
108 |
|
118 |
|
Share-based compensation |
1,783 |
|
2,466 |
|
Interest and accretion expense |
384 |
|
32 |
|
Deferred revenue |
142 |
|
11 |
|
Change in fair value of derivative financial instrument |
232 |
|
(89 |
) |
Interest income on trade and other receivables |
(79 |
) |
(212 |
) |
Changes in non-cash working capital balances |
|
|
Trade and other receivables |
(27 |
) |
(823 |
) |
Prepaid expenses and deposits |
465 |
|
636 |
|
Inventory |
(191 |
) |
(1,012 |
) |
Accounts payable and accrued liabilities |
334 |
|
(739 |
) |
Income taxes payable |
16 |
|
- |
|
Foreign exchange on cash |
(465 |
) |
(528 |
) |
Net cash flow used in operating activities |
(10,942 |
) |
(13,427 |
) |
|
|
|
Financing activities |
|
|
Repayment of long-term debt |
(372 |
) |
- |
|
Proceeds from share options exercised |
239 |
|
95 |
|
Proceeds from warrants exercised |
2,423 |
|
- |
|
Payment of lease liabilities |
(146 |
) |
(161 |
) |
Total cash from (used in) financing
activities |
2,144 |
|
(66 |
) |
|
|
|
Net change in cash during the period |
(8,798 |
) |
(13,493 |
) |
Foreign exchange on cash |
1,556 |
|
(424 |
) |
Cash – Beginning of period |
46,517 |
|
67,152 |
|
Cash – End of
period |
39,275 |
|
53,235 |
|
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