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 third
quarter ended September 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.
“As we have continued to prioritize our
TULSA-PRO® commercial activities in the United States over sales of
capital equipment in international markets the resulting strong
recurring revenue trend, which correlates directly with the
number of patients treated with TULSA, continued with a 40%
increase compared to Q3-2022, marking the sixth consecutive quarter
of recurring revenue growth,” said Arun Menawat, Profound’s CEO and
Chairman. “Receiving the U.S. Food and Drug Administration’s 510
(k) clearance of our TULSA AI Thermal Boost module was another key
highlight of the quarter. This software module, which enables
surgeons to temporarily increase the ablation target temperature to
increase the likelihood of ablating aggressive cancer cells, has
already been used by several TULSA-PRO® sites, and the feedback has
been very positive.”
Summary Third Quarter 2023
Results
For the quarter ended September 30, 2023, the
Company recorded revenue of approximately $1.7 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 $800,000 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 $7.6 million in the third quarter of 2023, a 18%
decrease from approximately $9.3 million in the third quarter of
2022.
Expenditures for R&D for the three months
ended September 30, 2023 were approximately $3.4 million, a
decrease of 28% compared with approximately $4.7 million in the
three months ended September 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 materials costs
due the conclusion of engineering expenses; lower other expenses
because of lower office supplies purchased; lower travel expenses
as less time was required on site for maintenance and repairs; and
a decrease in amortization expense 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; an increase in consulting fees due to
regulatory consultants being utilized to assist with regulatory
approvals in various countries.
G&A expenses for the 2023 third quarter
decreased by 15% to approximately $2.0 million, compared with
approximately $2.4 million in the same period in 2022, due
primarily to lower share based compensation, software and other
expenses due to fewer awards granted for employees, decreased
license costs for the enterprise resource planning and customer
relationship management software, and lower office supplies
purchased. These were partially offset by an increase in consulting
fees due to additional legal costs.
Third quarter 2023 S&D expenses were
approximately $2.2 million, down less than 1% from the third
quarter of 2022.
Net finance income for the three months ended
September 30, 2023 was approximately $1.0 million, compared with
approximately $3.3 million in the three months ended September 30,
2022.
Third quarter 2023 net loss was approximately
$5.6 million, or $0.26 per common share, compared to approximately
$5.0 million, or $0.24 per common share, in the three months ended
September 30, 2022.
Liquidity and Outstanding Share
Capital
As at September 30, 2023, Profound had cash of
approximately $33.6 million.
As at November 2, 2023, Profound had 21,365,733
common shares issued and outstanding.
For complete financial results, please see
Profound’s filings at www.sedarplus.ca, 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 as "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 Sheets(Unaudited)
|
|
September
30,2023$ |
|
|
December 31, 2022$ |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Cash |
|
33,625 |
|
|
46,517 |
|
Trade and other receivables |
|
6,619 |
|
|
6,344 |
|
Inventory |
|
7,425 |
|
|
7,941 |
|
Prepaid expenses and deposits |
|
648 |
|
|
1,222 |
|
Total current assets |
|
48,317 |
|
|
62,024 |
|
|
|
|
|
|
Property and equipment |
|
940 |
|
|
899 |
|
Intangible assets |
|
530 |
|
|
680 |
|
Right-of-use assets |
|
657 |
|
|
818 |
|
|
|
|
|
|
Total assets |
|
50,444 |
|
|
64,421 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
2,016 |
|
|
2,091 |
|
Deferred revenue |
|
673 |
|
|
471 |
|
Long-term debt |
|
1,905 |
|
|
523 |
|
Derivative financial instrument |
|
- |
|
|
563 |
|
Lease liabilities |
|
250 |
|
|
239 |
|
Income taxes payable |
|
343 |
|
|
298 |
|
Total current liabilities |
|
5,187 |
|
|
4,185 |
|
|
|
|
|
|
Long-term debt |
|
5,341 |
|
|
6,651 |
|
Deferred revenue |
|
727 |
|
|
764 |
|
Lease liabilities |
|
629 |
|
|
817 |
|
|
|
|
|
|
Total liabilities |
|
11,884 |
|
|
12,417 |
|
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
Share capital |
|
212,608 |
|
|
205,825 |
|
Contributed surplus |
|
18,386 |
|
|
18,704 |
|
Accumulated other comprehensive income |
|
16,588 |
|
|
16,837 |
|
Deficit |
|
(209,022 |
) |
|
(189,362 |
) |
|
|
|
|
|
Total Shareholders’ Equity |
|
38,560 |
|
|
52,004 |
|
|
|
|
|
|
Total Liabilities and Shareholders’ Equity |
|
50,444 |
|
|
64,421 |
|
Profound Medical Corp.Interim
Condensed Consolidated Statements of Loss and Comprehensive
Loss(Unaudited)
|
Three months endedSeptember
30,2023$ |
|
Three months endedSeptember
30,2022$ |
|
Nine
months endedSeptember
30,2023$ |
|
Nine
months endedSeptember
30,2022$ |
|
|
|
|
|
|
Revenue |
|
|
|
|
Recurring - non-capital |
1,728 |
|
1,235 |
|
4,797 |
|
3,420 |
|
Capital equipment |
- |
|
800 |
|
393 |
|
2,004 |
|
|
1,728 |
|
2,035 |
|
5,190 |
|
5,424 |
|
Cost of sales |
668 |
|
945 |
|
1,867 |
|
2,962 |
|
Gross profit |
1,060 |
|
1,090 |
|
3,323 |
|
2,462 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
Research and development |
3,415 |
|
4,733 |
|
10,410 |
|
11,601 |
|
General and administrative |
2,024 |
|
2,393 |
|
6,210 |
|
7,371 |
|
Selling and distribution |
2,181 |
|
2,198 |
|
6,537 |
|
6,794 |
|
Total operating expenses |
7,620 |
|
9,324 |
|
23,157 |
|
25,766 |
|
|
|
|
|
|
Operating loss |
6,560 |
|
8,234 |
|
19,834 |
|
23,304 |
|
|
|
|
|
|
Net finance income |
(1,014 |
) |
(3,271 |
) |
(275 |
) |
(4,243 |
) |
|
|
|
|
|
Loss before taxes |
5,546 |
|
4,963 |
|
19,559 |
|
19,061 |
|
|
|
|
|
|
Income taxes |
18 |
|
34 |
|
101 |
|
81 |
|
|
|
|
|
|
Net loss attributed to shareholders for the
period |
5,564 |
|
4,997 |
|
19,660 |
|
19,142 |
|
|
|
|
|
|
Other comprehensive (income) loss |
|
|
|
|
Item that may be reclassified to loss |
|
|
|
|
Foreign currency translation adjustment- net of tax |
(3,915 |
) |
11,103 |
|
249 |
|
14,992 |
|
Net loss and comprehensive loss/(income) for the
period |
1,649 |
|
(6,106 |
) |
19,909 |
|
4,150 |
|
|
|
|
|
|
Loss per share |
|
|
|
|
Basic and diluted loss per common share |
0.26 |
|
0.24 |
|
0.93 |
|
0.92 |
|
Profound Medical Corp.Interim
Condensed Consolidated Statements of Cash Flows(Unaudited)
|
Nine months endedSeptember
30,2023$ |
|
Nine months endedSeptember
30,2022$ |
|
|
|
|
Operating activities |
|
|
Net loss for the period |
(19,660 |
) |
(19,142 |
) |
Adjustments to reconcile net loss to net cash flows from operating
activities: |
|
|
Depreciation of property and equipment |
532 |
|
520 |
|
Amortization of intangible assets |
152 |
|
654 |
|
Depreciation of right-of-use assets |
163 |
|
174 |
|
Share-based compensation |
2,510 |
|
3,673 |
|
Interest and accretion expense |
582 |
|
46 |
|
Deferred revenue |
163 |
|
13 |
|
Change in fair value of derivative financial instrument |
232 |
|
(145 |
) |
Interest income on trade and other receivables |
(119 |
) |
(251 |
) |
Changes in non-cash working capital balances |
|
|
Trade and other receivables |
(155 |
) |
(1,235 |
) |
Prepaid expenses and deposits |
574 |
|
654 |
|
Inventory |
(54 |
) |
(1,294 |
) |
Accounts payable and accrued liabilities |
165 |
|
(501 |
) |
Income taxes payable |
45 |
|
- |
|
Foreign exchange on cash |
(410 |
) |
(2,348 |
) |
Net cash flow used in operating activities |
(15,280 |
) |
(19,182 |
) |
|
|
|
Financing activities |
|
|
Payment of long-term debt interest |
(489 |
) |
- |
|
Proceeds from share options exercised |
241 |
|
263 |
|
Proceeds from warrants exercised |
2,423 |
|
- |
|
Payment of lease liabilities |
(220 |
) |
(240 |
) |
Total cash from financing activities |
1,955 |
|
23 |
|
|
|
|
Net change in cash during the period |
(13,325 |
) |
(19,159 |
) |
Foreign exchange on cash |
433 |
|
(1,785 |
) |
Cash – Beginning of period |
46,517 |
|
67,152 |
|
Cash – End of period |
33,625 |
|
46,208 |
|
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