Global 2015 Revenue Grew by 13.8% Over 2014;
U.S. Revenue for the Year Grew 42.1% Over 2014
IRVINE, Calif., Feb. 22, 2016 (GLOBE NEWSWIRE) -- Lombard Medical, Inc. (NASDAQ:EVAR), a medical device company focused on endovascular aneurysm repair (EVAR) of abdominal aortic aneurysms (AAAs), today reported financial results and provided an operational update for the fourth quarter and year ended December 31, 2015.
As reported in January, full year revenue increased 13.8% over 2014 with total full year revenue of $15.1 million in 2015. On a constant currency basis, revenue for 2015 grew by 17.9%. Fourth quarter 2015 revenue was $2.9 million.
Gross margin for the year increased to 45.1% in 2015 as compared to the prior year’s 43.2%.
Recent Operational Highlights
- In January 2016, the first ever live case of Lombard’s new Altura® endovascular stent graft took place at the Leipzig Interventional Course in Germany.
- In February 2016, the first commercial Altura procedure was completed at the University Hospital of South Manchester in the UK.
Operational and Financial Results
Global Aorfix® revenue was $15.1 million for 2015 as compared to $13.3 million in 2014. Fourth quarter 2015 revenue of $2.9 million compared to $4.8 million in the same prior year period. The fourth quarter of 2014 was positively impacted by a non-recurring distributor stocking shipment to Lombard’s Japanese distribution partner.
Year-to-date gross margin of 45.1% compared favorably to the prior year rate of 43.2%, inclusive of gross margins of 28.2% in Q4 2015. Fourth quarter margins were adversely impacted by reduced overhead absorption coupled with the Company’s transition of manufacturing activities to the new generation IntelliFlex™ LP delivery system. With respect to IntelliFlex, the Company continues to anticipate CE Mark and European launch of this new delivery system in the summer of 2016, however, FDA approval and U.S. launch is now anticipated in the second half of this year due to a recent FDA request for additional data to support the submission of this category of delivery systems for approval.
In the U.S., revenue grew 42.1% to $4.6 million in 2015 as compared to $3.2 million in the prior year. Fourth quarter 2015 U.S. revenue of $1.2 million was flat as compared to the prior year.
In Japan, procedure rates continued to rise as physicians performed 128 Aorfix procedures in the 2015 fourth quarter compared to 92 in the prior year period. For the full year 2015, Japanese procedures totaled 436 cases compared to 112 in 2014.
Total operating expense for the 2015 fourth quarter and full year was $12.8 million and $46.1 million, respectively, compared to $11.1 million and $41.9 million in the prior year periods. The net loss for the fourth quarter of 2015 was $11.6 million, or $0.58 loss per share, compared to a net loss of $8.3 million, or $0.51 loss per share, for the fourth quarter of 2014. The net loss for 2015 was $37.8 million, or $2.13 loss per share, compared to $34.8 million, or $2.39 loss per share, for 2014.
The Company’s balance sheet as of December 31, 2015 showed total cash and cash equivalents of $32.3 million.
CEO Simon Hubbert said, “2015 was a transformative year with the acquisition of Altura Medical in July and subsequent preparation for the Altura launch in Europe which is now underway. We have increased our direct sales force in the UK and Germany where we aim to demonstrate the impact of a unique portfolio approach that highlights Altura, our revolutionary new stent graft system that promises to transform AAA treatment into a simple, efficient, and potentially outpatient procedure for many patients, alongside Aorfix, the only AAA stent graft with global approval to treat neck angulation up to 90 degrees. We believe this provides for the most competitive portfolio approach in the AAA market which will lead to significant market share growth in 2016.”
Insider Buying
During the fourth quarter of 2015 and through the date of this release, the Company’s senior management and members of the board of directors acquired 101,281 shares of Lombard stock in the open market. There were no sales.
Company Outlook
The Company expects to achieve year-over-year revenue growth in 2016 of approximately 20%.
Conference Call
Lombard’s management will discuss the Company's financial results for the fourth quarter and year ended December 31, 2015 and provide a general business update during a conference call beginning at 10:30 a.m. Eastern Time today, Monday, February 22, 2016. To join the call, participants may dial 1-877-407-4018 (domestic), 0800-756-3429 (UK toll-free) or 1-201-689-8471 (international). To listen to a live webcast of the conference call, visit the Events and Presentations page under the Investors tab at www.lombardmedical.com. An archived replay of the webcast will be available shortly following the completion of the call on the Events and Presentations page under the Investors tab at www.lombardmedical.com.
About Lombard Medical, Inc.
Lombard Medical, Inc. is an Irvine, CA-based medical device company focused on the $1.7bn market for minimally invasive treatment of abdominal aortic aneurysms (AAAs). The Company has global regulatory approval for Aorfix®, an endovascular stent graft which has been specifically designed to treat patients with the broadest range of AAA anatomies, including aortic neck angulation up to 90 degrees. The Company has also achieved CE Mark for the Altura® endograft system, an innovative ultra-low profile endovascular stent graft that offers a simple and predictable solution for the treatment of more standard AAA anatomies. Altura was launched in Europe in January 2016, with an international rollout planned for later in 2016. For more information, please visit www.lombardmedical.com.
Forward-Looking Statements
This announcement contains forward-looking statements that reflect the Company’s current expectations regarding future events. These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “expect,” “future,” “anticipate,” “look forward to,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “outlook,” “potential,” “optimistic,” “confidence,” “continue,” “evolve,” “expand,” “growth” or words and phrases of similar meaning. Statements that describe objectives, plans or goals also are forward-looking statements. Forward-looking statements are subject to risks, management assumptions and uncertainties. Actual results could differ materially from those projected herein and depend on a number of factors, including the success of the Company’s research and development and commercialization strategies, the uncertainties related to the regulatory process and the acceptance of the Company’s products by hospitals and other medical professionals, the uncertainty of estimated revenues and profits, the uncertainty of current domestic and international economic conditions that could adversely affect the level of demand for the Company’s products and increased volatility in foreign exchange rates, the inability to raise additional funds, and the risks, uncertainties and other factors described under the heading “Risk Factors” in the Company’s Form 20-F filed with the Securities and Exchange Commission dated April 29, 2015. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included herein are made only as of the date of this report and the Company undertakes no obligation to update these statements in the future.
- Tables Follow –
| Consolidated Statements of Comprehensive Income | ||||||||||||||||||
| for the three- and twelve-month periods ended December 31, 2015 (unaudited) | ||||||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| $’000 | $’000 | $’000 | $’000 | |||||||||||||||
| Revenue | 2,943 | 4,758 | 15,114 | 13,277 | ||||||||||||||
| Cost of sales | (2,113 | ) | (2,553 | ) | (8,296 | ) | (7,541 | ) | ||||||||||
| Gross profit | 830 | 2,205 | 6,818 | 5,736 | ||||||||||||||
| Gross margin | 28 | % | 46 | % | 45 | % | 43 | % | ||||||||||
| Selling, marketing and distribution expenses | (5,794 | ) | (5,786 | ) | (23,125 | ) | (21,363 | ) | ||||||||||
| Research and development expenses | (3,318 | ) | (2,737 | ) | (11,279 | ) | (9,213 | ) | ||||||||||
| Administrative expenses | (3,638 | ) | (2,616 | ) | (11,707 | ) | (9,800 | ) | ||||||||||
| Initial Public Offering expenses | - | - | - | (1,503 | ) | |||||||||||||
| Total operating expenses | (12,750 | ) | (11,139 | ) | (46,111 | ) | (41,879 | ) | ||||||||||
| Operating loss | (11,920 | ) | (8,934 | ) | (39,293 | ) | (36,143 | ) | ||||||||||
| Finance income—interest receivable | 20 | 58 | 134 | 247 | ||||||||||||||
| Finance costs | (269 | ) | (24 | ) | (860 | ) | (83 | ) | ||||||||||
| Loss before taxation | (12,169 | ) | (8,900 | ) | (40,019 | ) | (35,979 | ) | ||||||||||
| Taxation | 564 | 617 | 2,215 | 1,227 | ||||||||||||||
| Loss for the period | (11,605 | ) | (8,283 | ) | (37,804 | ) | (34,752 | ) | ||||||||||
| Other comprehensive income: | ||||||||||||||||||
| Items that may be subsequently reclassified to profit or loss | ||||||||||||||||||
| Currency translation differences | (287 | ) | 39 | (975 | ) | (1,947 | ) | |||||||||||
| Total comprehensive loss for the period | (11,892 | ) | (8,244 | ) | (38,779 | ) | (36,699 | ) | ||||||||||
| Basic and diluted loss per ordinary share (cents) | ||||||||||||||||||
| From continuing operations | (58.4 | ) | (51.2 | ) | (212.9 | ) | (238.7 | ) | ||||||||||
| Consolidated Balance Sheet | ||||||||||
| as at December 31, 2015 (unaudited) | ||||||||||
| 2015 | 2014 | |||||||||
| $’000 | $’000 | |||||||||
| Assets | ||||||||||
| Goodwill | 16,052 | 3,289 | ||||||||
| Intangible assets | 21,889 | 1,970 | ||||||||
| Property, plant and equipment | 3,043 | 3,087 | ||||||||
| Other receivables | 176 | 348 | ||||||||
| Non-current assets | 41,160 | 8,694 | ||||||||
| Inventories | 6,462 | 4,895 | ||||||||
| Trade and other receivables | 4,168 | 3,911 | ||||||||
| Taxation recoverable | 1,618 | 2,064 | ||||||||
| Cash and cash equivalents | 32,332 | 53,334 | ||||||||
| Current assets | 44,580 | 64,205 | ||||||||
| Total assets | 85,740 | 72,899 | ||||||||
| Liabilities | ||||||||||
| Trade and other payables | (8,236 | ) | (5,434 | ) | ||||||
| Current liabilities | (8,236 | ) | (5,434 | ) | ||||||
| Borrowings | (23,115 | ) | (2,632 | ) | ||||||
| Deferred tax liabilities | (674 | ) | - | |||||||
| Contingent consideration | (10,600 | ) | - | |||||||
| Non-current liabilities | (34,389 | ) | (2,632 | ) | ||||||
| Total Liabilities | (42,625 | ) | (8,066 | ) | ||||||
| Net assets | 43,115 | 64,833 | ||||||||
| Equity | ||||||||||
| Called up share capital | 199 | 162 | ||||||||
| Share premium account | 63,853 | 49,608 | ||||||||
| Capital reorganization reserve | 205,686 | 205,686 | ||||||||
| Translation reserve | 1,270 | 2,245 | ||||||||
| Accumulated loss | (227,893 | ) | (192,868 | ) | ||||||
| Total equity | 43,115 | 64,833 | ||||||||
| Consolidated Statements of Changes in Equity | ||||||||||||||||||||||||||
| for the twelve month period ended December 31, 2015 (unaudited) | ||||||||||||||||||||||||||
| Share Capital | Share Premium | Other Reserves | Translation Reserve | Capital Reorganization Reserve | Accumulated Loss | Total Equity | ||||||||||||||||||||
| $’000 | $’000 | $’000 | $‘000 | $‘000 | $’000 | $’000 | ||||||||||||||||||||
| At January 1, 2014 | 52,406 | 134,305 | 19,087 | 4,192 | - | (160,657 | ) | 49,333 | ||||||||||||||||||
| Loss for the period | - | - | - | - | - | (34,752 | ) | (34,752 | ) | |||||||||||||||||
| Share-based compensation | - | - | - | - | - | 2,541 | 2,541 | |||||||||||||||||||
| Capital reorganization | (52,294 | ) | (134,305 | ) | (19,087 | ) | - | 205,686 | - | - | ||||||||||||||||
| Issue of ordinary shares | 50 | 54,950 | - | - | - | - | 55,000 | |||||||||||||||||||
| Share issue expenses | - | (5,342 | ) | - | - | - | - | (5,342 | ) | |||||||||||||||||
| Currency translation | - | - | - | (1,947 | ) | - | - | (1,947 | ) | |||||||||||||||||
| At December 31, 2014 | 162 | 49,608 | - | 2,245 | 205,686 | (192,868 | ) | 64,833 | ||||||||||||||||||
| Loss for the period | - | - | - | - | - | (37,804 | ) | (37,804 | ) | |||||||||||||||||
| Share-based compensation | - | - | - | - | - | 2,779 | 2,779 | |||||||||||||||||||
| Issue of ordinary shares | 37 | 14,245 | - | - | - | - | 14,282 | |||||||||||||||||||
| Currency translation | - | - | - | (975 | ) | - | - | (975 | ) | |||||||||||||||||
| At December 31, 2015 | 199 | 63,853 | - | 1,270 | 205,686 | (227,893 | ) | 43,115 | ||||||||||||||||||
| Consolidated Cash Flow Statements | ||||||||||
| for the twelve month period ended December 31, 2015 (unaudited) | ||||||||||
| 2015 | 2014 | |||||||||
| $’000 | $’000 | |||||||||
| Loss before taxation | (40,019 | ) | (35,979 | ) | ||||||
| Depreciation and amortization of licenses, software and property plant and equipment | 1,798 | 1,171 | ||||||||
| Share-based compensation expense | 2,779 | 2,541 | ||||||||
| Loss on sale of tangible assets | 66 | - | ||||||||
| Net finance expense/(income) | 726 | (164 | ) | |||||||
| Increase in inventories | (1,779 | ) | (1,841 | ) | ||||||
| Increase in receivables | (185 | ) | (483 | ) | ||||||
| (Decrease)/increase in payables | 234 | (790 | ) | |||||||
| Net cash used in operating activities | (36,380 | ) | (35,545 | ) | ||||||
| Research and development tax credits | 2,584 | 1,172 | ||||||||
| Net cash outflow from operating activities | (33,796 | ) | (34,373 | ) | ||||||
| Cash flows from investing activities | ||||||||||
| Interest received | 87 | 167 | ||||||||
| Purchase of property, plant and equipment | (1,239 | ) | (1,481 | ) | ||||||
| Purchase of intangible assets | (15 | ) | (266 | ) | ||||||
| Cash paid for acquisition | (200 | ) | - | |||||||
| Net cash flows used in investing activities | (1,367 | ) | (1,580 | ) | ||||||
| Cash flows from financing activities | ||||||||||
| Interest paid | (688 | ) | - | |||||||
| Proceeds from issue of loan notes | 21,000 | - | ||||||||
| Loan notes repaid | (5,331 | ) | - | |||||||
| Loan notes issuance expenses | (438 | ) | - | |||||||
| Proceeds from issue of ordinary shares | - | 55,000 | ||||||||
| Share issue expenses | - | (5,342 | ) | |||||||
| Net cash flows from financing activities | 14,543 | 49,658 | ||||||||
| (Decrease)/Increase in cash and cash equivalents | (20,620 | ) | 13,705 | |||||||
| Cash and cash equivalents at beginning of year | 53,334 | 40,866 | ||||||||
| Effects of exchange rates on cash and cash equivalents | (382 | ) | (1,237 | ) | ||||||
| Cash and cash equivalents at end of year | 32,332 | 53,334 | ||||||||