First Quarter Financial Results
- First quarter revenue was
$41.4 million , a 12.9% increase compared to the first quarter of 2023. - In the first quarter of 2024, our gross margin increased to 78.8%, up from 77.7%, as reclassified* in the same quarter of the previous year.
- Net loss for the quarter was
$6.6 million , or$0.15 per share, compared to net loss of$7.1 million , or$0.17 per share in the first quarter of 2023. - Adjusted net loss for the quarter was
$2.7 million , or$0.06 per share, compared to adjusted net loss of$4.1 million , or$0.10 per share in the first quarter of 2023. - Adjusted EBITDA was
$1.0 million for the quarter, compared to an adjusted EBITDA loss of$3.8 million in the first quarter of 2023. - The balance of all cash, cash equivalents, and investments on
March 31, 2024 , was$23.6 million , as compared to a balance of$37.0 million onDecember 31, 2023 .
“We are pleased with the positive trend in the bottom line and continue to focus on higher productivity as we grow revenue. This is in line with our goal of reaching profitability and positive cashflow as we execute on our growth strategy,” commented
* See Reclassification section and Reclassification Financial Table below.
Summary of Operational and Business Highlights
- Core Accounts totaled 400, an increase of 14.3% over the prior-year level of 350, and an increase of 6.4% sequentially. Revenue from Core Accounts represents approximately 65% of revenue.
- We ended the first quarter with 115 direct sales representatives compared to 116 at the end of the fourth quarter.
- In February we completed a productive pre-BLA meeting with FDA where we gained alignment on the content on the modules for submission. We received approval of our rolling submission proposal, and we anticipate the BLA filing to be completed in the third quarter of 2024. We believe the submission timeline will allow for a potential approval in mid-2025.
- We are pleased with the adoption of Axoguard HA+ Nerve Protector™ across multiple applications. In the first quarter we initiated a limited market release of Avive+ Soft Tissue Matrix and have completed the first implant. We expect to drive continued growth within the nerve protection category following the full launch of Avive+ Soft Tissue Matrix™ in June.
- We continue to see strong interest in and adoption of the Resensation® neurotization techniques for autologous and implant-based breast reconstructions driven by expanding surgeon education and patient activation.
2024 Financial Guidance
We are maintaining our annual revenue guidance in the range of
Reclassifications
Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the condensed consolidated statement of operations for the three months ended
Effective as of the first quarter of 2024, the Company voluntarily changed its accounting policy for shipping and handling costs. Under the new accounting policy, these costs are included in Costs of goods sold, whereas they were previously included in Sales and marketing expenses. Including these expenses in Costs of goods sold better aligns these costs with the related revenue in the gross profit calculation. Although the prior method of accounting continues to be an accepted alternative, the new accounting policy is more widely used in the industry and provides improved comparability of the Company's financial statements to its peers. This change in accounting policy has been applied retrospectively. The consolidated statement of operations for the three months ended
Effective as of the first quarter of 2024, the Company also ceased allocating certain costs to and from certain departments. Previously such costs had been allocated based on the Company’s estimate of the proportionate share of total expense to Cost of goods sold, Sales and marketing, Research and development, and General and administrative. The Company determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency of its operations. To conform the 2023 presentation to the current quarter’s presentation,
These reclassifications had no impact on net revenue, loss from operations, net loss, or loss per common share for prior periods and do not represent a restatement of the Company's previously issued consolidated financial statements.
Conference Call
The Company will host a conference call and webcast for the investment community today at
Following the conference call, a replay will be available in the Investors section of the Company's website at www.axogeninc.com under Investors.
About
For more information, visit www.axogeninc.com.
Cautionary Statements Concerning Forward-Looking Statements
This press release contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or predictions of future conditions, events, or results based on various assumptions and management's estimates of trends and economic factors in the markets in which we are active, as well as our business plans. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” “continue,” “may,” “should,” “will,” “goals,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include the Company’s expectations and estimates regarding the use of the product across various applications and surgical specialties that encompass scheduled and emergent procedures, Ms. Zaderej’s statements on the Company’s future focus, the anticipated timing of the completion of the rolling BLA submission and potential for approval of the BLA in mid-2025, the expected timing of the full launch of Avive+ Soft Tissue Matrix TM and optimism of continued growth within the nerve protection category following the full launch; optimism regarding strong interest and adoption of the Resensation® neurotization techniques for autologous and implant-based breast reconstructions, as well as statements under the subheading “2024 Financial Guidance.” Actual results or events could differ materially from those described in any forward-looking statements as a result of various factors, including, without limitation, global supply chain issues, hospital staffing issues, product development, product potential, clinical outcomes, regulatory process and approvals, financial performance, sales growth, surgeon and product adoption, market awareness of our products, data validation, our visibility at and sponsorship of conferences and educational events, global business disruption caused by Russia’s invasion of
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, we use the non-GAAP financial measures of EBITDA, which measures earnings before interest, income taxes, depreciation and amortization, and Adjusted EBITDA which further excludes non-cash stock compensation expense and litigation and related expenses. We also use the non-GAAP financial measures of Adjusted Net Income or Loss and Adjusted Net Income or Loss Per Common Share - basic and diluted which excludes non-cash stock compensation expense and litigation and related expenses from Net Loss and Net Loss Per Common Share - basic and diluted, respectively. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of the non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP should be carefully evaluated.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the performance of our business, the Company’s cash available for operations, and the Company’s ability to meet future capital expenditure and working capital requirements.
Contact: htamayo@axogeninc.com |
AXOGEN, INC. Condensed Consolidated Balance Sheets (unaudited) (In thousands, except share and per share amounts) | |||||||
| 2024 | 2023 | |||||
Assets | | | |||||
Current assets: | | | |||||
Cash and cash equivalents | $ | 15,713 | $ | 31,024 | |||
Restricted cash | 6,000 | 6,002 | |||||
Investments | 1,921 | — | |||||
Accounts receivable, net of allowance for doubtful accounts of | 24,212 | 25,147 | |||||
Inventory | 27,636 | 23,020 | |||||
Prepaid expenses and other | 3,181 | 2,811 | |||||
Total current assets | 78,663 | 88,004 | |||||
Property and equipment, net | 87,838 | 88,730 | |||||
Operating lease right-of-use assets | 15,247 | 15,562 | |||||
Intangible assets, net | 4,768 | 4,531 | |||||
Total assets | $ | 186,516 | $ | 196,827 | |||
| |||||||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 21,288 | $ | 28,883 | |||
Current maturities of long-term lease obligations | 1,644 | 1,547 | |||||
Total current liabilities | 22,932 | 30,430 | |||||
| |||||||
Long-term debt, net of debt discount and financing fees | 46,825 | 46,603 | |||||
Long-term lease obligations | 20,681 | 21,142 | |||||
Debt derivative liabilities | 2,922 | 2,987 | |||||
Total liabilities | 93,360 | 101,162 | |||||
| |||||||
Commitments and contingencies - see Note 12 | |||||||
| |||||||
Shareholders’ equity: | |||||||
Common stock, | 437 | 431 | |||||
Additional paid-in capital | 380,650 | 376,530 | |||||
Accumulated deficit | (287,931 | ) | (281,296 | ) | |||
Total shareholders’ equity | 93,156 | 95,665 | |||||
Total liabilities and shareholders’ equity | $ | 186,516 | 196,827 |
AXOGEN, INC. Condensed Consolidated Statements of Operations (unaudited) (In thousands, Except share and per share amounts) | |||||||
Three Months Ended | |||||||
| 2024 | 2023 | |||||
Revenues | $ | 41,378 | $ | 36,664 | |||
Cost of goods sold | 8,758 | 8,172 | |||||
Gross profit | 32,620 | 28,492 | |||||
Costs and expenses: | |||||||
Sales and marketing | 19,815 | 19,446 | |||||
Research and development | 7,409 | 6,326 | |||||
General and administrative | 9,956 | 10,061 | |||||
Total costs and expenses | 37,180 | 35,833 | |||||
Loss from operations | (4,560 | ) | (7,341 | ) | |||
Other (expense) income: | |||||||
Investment income | 293 | 549 | |||||
Interest expense | (2,326 | ) | (16 | ) | |||
Change in fair value of derivatives | 65 | (185 | ) | ||||
Other expense | (107 | ) | (81 | ) | |||
Total other (expense) income, net | (2,075 | ) | 267 | ||||
Net loss | $ | (6,635 | ) | $ | (7,074 | ) | |
Weighted average common shares outstanding — basic and diluted | 43,233,149 | 42,571,021 | |||||
Loss per common share — basic and diluted | $ | (0.15 | ) | $ | (0.17 | ) |
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (unaudited) (In thousands, except per share amounts) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net loss | $ | (6,635 | ) | $ | (7,074 | ) | |
Depreciation and amortization expense | 1,582 | 780 | |||||
Investment income | (293 | ) | (549 | ) | |||
Income tax expense | 103 | 83 | |||||
Interest expense | 2,326 | 16 | |||||
EBITDA - non GAAP | $ | (2,917 | ) | $ | (6,744 | ) | |
Non cash stock-based compensation expense | 3,919 | 2,954 | |||||
Adjusted EBITDA - non GAAP | $ | 1,002 | $ | (3,790 | ) | ||
Net loss | $ | (6,635 | ) | $ | (7,074 | ) | |
Non cash stock-based compensation expense | 3,919 | 2,954 | |||||
Adjusted net loss - non GAAP | $ | (2,716 | ) | $ | (4,120 | ) | |
Weighted average common shares outstanding basic and diluted | 43,233,149 | 42,571,021 | |||||
Loss per common share — basic and diluted | $ | (0.15 | ) | $ | (0.17 | ) | |
Non cash stock-based compensation expense | $ | 0.09 | $ | 0.07 | |||
Adjusted net loss per common share - basis and diluted - non GAAP | $ | (0.06 | ) | $ | (0.10 | ) | |
AXOGEN, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited) (In thousands, except per share) | |||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||
| Shares | Amount | |||||||||||||
Three Months Ended | |||||||||||||||
Balance, | 43,124,496 | $ | 431 | $ | 376,530 | $ | (281,296 | ) | 97,152 | ||||||
Stock-based compensation | — | — | 3,919 | — | 3,919 | ||||||||||
Issuance of restricted and performance stock units | 539,233 | 5 | (5 | ) | — | — | |||||||||
Exercise of stock options and employee stock purchase plan | 24,000 | 1 | 206 | — | 207 | ||||||||||
Net loss | — | — | — | (6,635 | ) | (6,635 | ) | ||||||||
Balance at | 43,687,729 | $ | 437 | $ | 380,650 | $ | (287,931 | ) | 93,156 | ||||||
Three Months Ended | |||||||||||||||
Balance, | 42,445,517 | $ | 424 | $ | 360,155 | $ | (259,580 | ) | 100,999 | ||||||
Stock-based compensation | — | — | 2,954 | — | 2,954 | ||||||||||
Issuance of restricted and performance stock units | 238,719 | 3 | (3 | ) | — | — | |||||||||
Exercise of stock options and employee stock purchase plan | 125,758 | 1 | 633 | — | 634 | ||||||||||
Net loss | — | — | — | (7,074 | ) | (7,074 | ) | ||||||||
Balance at | 42,809,994 | 428 | 363,739 | (266,654 | ) | 97,513 |
AXOGEN, INC. Condensed Consolidated Statements of Cash Flows (unaudited) | |||||||
Three Months Ended | |||||||
| 2024 | 2023 | |||||
Cash flows from operating activities: | |||||||
Net loss | $ | (6,635 | ) | $ | (7,074 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 1,520 | 709 | |||||
Amortization of right-of-use assets | 315 | 464 | |||||
Amortization of intangible assets | 62 | 71 | |||||
Amortization of debt discount and deferred financing fees | 222 | 219 | |||||
Provision for (recovery) bad debt | 255 | (267 | ) | ||||
Provision for inventory write-down | 367 | 581 | |||||
Investment (gains) losses | (10 | ) | (426 | ) | |||
Change in fair value of derivatives | (65 | ) | 185 | ||||
Share-based compensation | 3,919 | 2,954 | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | 681 | 175 | |||||
Inventory | (4,983 | ) | (1,525 | ) | |||
Prepaid expenses and other | (262 | ) | (509 | ) | |||
Accounts payable and accrued expenses | (7,291 | ) | (2,442 | ) | |||
Operating lease obligations | (360 | ) | (537 | ) | |||
Cash paid for interest portion of finance leases | (1 | ) | (1 | ) | |||
Net cash used in operating activities | $ | (12,266 | ) | $ | (7,423 | ) | |
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (924 | ) | (4,304 | ) | |||
Purchase of investments | (1,910 | ) | (10,203 | ) | |||
Proceeds from sale of investments | — | 13,974 | |||||
Cash payments for intangible assets | (417 | ) | (253 | ) | |||
Net cash used in investing activities | $ | (3,251 | ) | $ | (786 | ) | |
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | |||||||
Cash paid for debt portion of finance leases | (3 | ) | (1 | ) | |||
Proceeds from exercise of stock options and ESPP stock purchases | 207 | 634 | |||||
Net cash provided by financing activities | $ | 204 | $ | 633 | |||
Net decrease in cash, cash equivalents, and restricted cash | (15,313 | ) | (7,576 | ) | |||
Cash, cash equivalents, and restricted cash, beginning of period | 37,026 | 21,535 | |||||
Cash, cash equivalents, and restricted cash, end of period | $ | 21,713 | $ | 13,959 |
AXOGEN, INC. Reclassification Financial Tables (in thousands) | |||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||
As Previously Reported | As Currently Reported | Adjustments | As Previously Reported | As Currently Reported | Adjustments | ||||||||||||||
Revenues | $ | 138,584 | $ | 138,584 | $ | - | $ | 159,012 | $ | 159,012 | $ | - | |||||||
Cost of goods sold | 24,147 | 29,775 | 5,628 | 31,138 | 37,143 | 6,006 | |||||||||||||
Gross profit | 114,437 | 108,809 | (5,628 | ) | 127,874 | 121,869 | (6,006 | ) | |||||||||||
Gross Profit % | 82.6 | % | 78.5 | % | -4.1 | % | 80.4 | % | 76.6 | % | -3.8 | % | |||||||
Costs and expenses: | |||||||||||||||||||
Sales and marketing | 80,228 | 71,983 | (8,245 | ) | 86,060 | 77,580 | (8,481 | ) | |||||||||||
Research and development | 27,158 | 25,627 | (1,531 | ) | 28,333 | 27,339 | (995 | ) | |||||||||||
General and administrative | 36,758 | 40,906 | 4,148 | 34,943 | 38,412 | 3,470 | |||||||||||||
Total costs and expenses | 144,144 | 138,516 | (5,628 | ) | 149,336 | 143,331 | (6,006 | ) | |||||||||||
Loss from operations | (29,707 | ) | (29,707 | ) | - | (21,462 | ) | (21,462 | ) | - | |||||||||
Total other income (expense), net | 759 | 759 | - | (255 | ) | (255 | ) | - | |||||||||||
Net loss | $ | (28,948 | ) | $ | (28,948 | ) | $ | - | $ | (21,717 | ) | $ | (21,717 | ) | $ | - |
Quarter ended | Quarter Ended | ||||||||||||||||||
As Previously Reported | As Adjusted | Adjustments | As Previously Reported | As Currently Reported | Adjustments | ||||||||||||||
Revenues | $ | 36,664 | $ | 36,664 | $ | - | $ | 38,154.86 | $ | 38,154.86 | $ | - | |||||||
Cost of goods sold | 6,709 | 8,172 | 1,463 | 7,228 | 8,503 | 1,275 | |||||||||||||
Gross profit | 29,955 | 28,492 | 28,492 | 30,927 | 29,652 | (1,275 | ) | ||||||||||||
Gross Profit % | 81.7 | % | 77.7 | % | -4.0 | % | 81.1 | % | 77.7 | % | -3.3 | % | |||||||
Costs and expenses: | |||||||||||||||||||
Sales and marketing | 21,618 | 19,446 | (2,172 | ) | 20,838 | 18,861 | (1,978 | ) | |||||||||||
Research and development | 6,679 | 6,326 | (353 | ) | 7,363 | 7,144 | (219 | ) | |||||||||||
General and administrative | 8,999 | 10,061 | 1,062 | 9,628 | 10,550 | 922 | |||||||||||||
Total costs and expenses | 37,297 | 35,834 | (1,463 | ) | 37,830 | 36,555 | (1,275 | ) | |||||||||||
Loss from operations | (7,342 | ) | (7,342 | ) | - | (6,903 | ) | (6,903 | ) | - | |||||||||
Total other income (expense), net | 267 | 267 | - | 242 | 242 | - | |||||||||||||
Net loss | $ | (7,074 | ) | $ | (7,074 | ) | $ | - | $ | (6,661 | ) | $ | (6,661 | ) | $ | - | |||
Quater Ended | Quarter Ended | ||||||||||||||||||
As Previously Reported | As Currently Reported | Adjustments | As Previously Reported | As Currently Reported | Adjustments | ||||||||||||||
Revenues | $ | 41,271 | $ | 41,271 | $ | - | $ | 42,922 | $ | 42,922 | $ | - | |||||||
Cost of goods sold | 8,043 | 9,567 | 1,524 | 9,158 | 10,902 | 1,744 | |||||||||||||
Gross profit | 33,228 | 31,704 | (1,524 | ) | 33,764 | 32,020 | (1,744 | ) | |||||||||||
Gross Profit % | 80.5 | % | 76.8 | % | -3.7 | % | 78.7 | % | 74.6 | % | -4.1 | % | |||||||
Costs and expenses: | |||||||||||||||||||
Sales and marketing | 21,429 | 19,166 | (2,264 | ) | 22,174 | 20,106 | (2,068 | ) | |||||||||||
Research and development | 6,989 | 6,694 | (295 | ) | 7,302 | 7,174 | (127 | ) | |||||||||||
General and administrative | 8,835 | 9,870 | 1,035 | 7,480 | 7,931 | 451 | |||||||||||||
Total costs and expenses | 37,254 | 35,730 | (1,524 | ) | 36,956 | 35,212 | (1,744 | ) | |||||||||||
Loss from operations | (4,025 | ) | (4,025 | ) | - | (3,192 | ) | (3,192 | ) | - | |||||||||
Total other income (expense), net | (65 | ) | (65 | ) | - | (699 | ) | (699 | ) | - | |||||||||
Net loss | $ | (4,090 | ) | $ | (4,090 | ) | $ | - | $ | (3,891 | ) | $ | (3,891 | ) | $ | - | |||
Source:
2024 GlobeNewswire, Inc., source