IRVINE, Calif., Oct. 27, 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 for the third quarter and nine months ended September 30, 2016.
Financial Results
For the 2016 third quarter, global revenue was $3.0 million as compared to $4.2 million in the same prior year period. For the first nine months of 2016, global revenue was $9.8 million compared to $12.2 million in the prior year period.
The year-over-year reduction in global revenue is attributable to the redeployment of commercial resources from the US to Europe to support the launch of the Altura® endovascular stent graft along with delayed stocking orders from the Company’s Japanese distribution partner as it prepares for approval and launch of the IntelliFlex™ LP delivery system.
Partially offsetting the reduction in revenue was performance in the Company’s European direct markets (Germany and the UK) where revenue increased by 33.6 percent for the quarter over the same period of last year and 25.8 percent for the nine month year-to-date period.
Gross margin for the 2016 third quarter and first nine months was 11.5 percent and 17.9 percent, respectively, compared to 48.8 percent and 49.2 percent for the prior year periods. As was the case in the 2016 second quarter, third quarter margins were adversely impacted by several factors including manufacturing start-up expense related to the launch of the Altura product line into Europe and other locations outside the US. Additionally, reduced overhead absorption on lower volume coupled with the Company’s transition of manufacturing activities to the new generation IntelliFlex delivery system contributed to the margin variance.
Operating expense for the 2016 third quarter and first nine months was reduced to $7.1 million and $23.1 million, respectively, compared to $11.4 million and $33.4 million in the prior year periods. The significant decrease in operating expense was primarily attributable to the reduction in the US sales force, trimming non-essential programs and general cost control activities in all areas of the business.
The net loss for this year’s third quarter was $7.4 million, or $0.37 loss per share, compared to a net loss of $8.5 million, or $0.45 loss per share, for the third quarter of 2015. For the first nine months of 2016, the net loss was $23.3 million, or $1.17 loss per share, compared to $26.2 million, or $1.54 loss per share, for the prior year period.
As of September 30, 2016, the Company had cash and cash equivalents of $9.9 million.
Conference Call
Lombard’s management will not be holding a conference call to discuss the Company's results for the third quarter as management continues to focus on the exploration of strategic alternatives as described in the prior quarter-end release dated August 22, 2016. To listen to a live webcast of the August 22, 2016 conference call, visit the Investors/Events and Presentations section of the Lombard website at www.lombardmedical.com.
About Lombard Medical, Inc.
Lombard Medical, Inc. is a 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 the UK and Germany in February 2016 with a broader international rollout currently underway. 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, 2016. 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.
For further information:
| Lombard Medical, Inc. Simon Hubbert, Chief Executive Officer William J. Kullback, Chief Financial Officer | Tel:+1 949 379 3750 / +44 (0)1235 750 800 Tel: +1 949 748 6764 |
- Tables Follow –
| Consolidated Statements of Comprehensive Loss | ||||||||||||||||||||
| (In Thousands, Except Per Share Amounts) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenue | $ | 3,044 | $ | 4,227 | $ | 9,769 | $ | 12,171 | ||||||||||||
| Cost of sales | 2,694 | 2,164 | 8,020 | 6,183 | ||||||||||||||||
| Gross profit | 350 | 2,063 | 1,749 | 5,988 | ||||||||||||||||
| Selling, marketing and distribution expenses | 3,600 | 5,384 | 11,197 | 17,331 | ||||||||||||||||
| Research and development expenses | 1,739 | 2,915 | 6,336 | 7,961 | ||||||||||||||||
| Administrative expenses | 1,776 | 3,144 | 5,594 | 8,069 | ||||||||||||||||
| Total operating expenses | 7,115 | 11,443 | 23,127 | 33,361 | ||||||||||||||||
| Operating loss | (6,765 | ) | (9,380 | ) | (21,378 | ) | (27,373 | ) | ||||||||||||
| Finance income | 18 | 32 | 89 | 114 | ||||||||||||||||
| Finance costs | (547 | ) | (335 | ) | (1,633 | ) | (591 | ) | ||||||||||||
| Change in fair value of contingent liabilities | (289 | ) | — | (997 | ) | — | ||||||||||||||
| Loss before taxation | (7,583 | ) | (9,683 | ) | (23,919 | ) | (27,850 | ) | ||||||||||||
| Taxation | 161 | 1,223 | 576 | 1,651 | ||||||||||||||||
| Loss for the period | $ | (7,422 | ) | $ | (8,460 | ) | $ | (23,343 | ) | $ | (26,199 | ) | ||||||||
| Other comprehensive income/(loss): | ||||||||||||||||||||
| Items that may subsequently be reclassified to profit or loss | ||||||||||||||||||||
| Currency translation differences | (700 | ) | (938 | ) | (3,052 | ) | (688 | ) | ||||||||||||
| Total comprehensive loss for the period | $ | (8,122 | ) | $ | (9,398 | ) | $ | (26,395 | ) | $ | (26,887 | ) | ||||||||
| Basic and diluted loss per ordinary share | ||||||||||||||||||||
| From continuing operations | $ | (0.37 | ) | $ | (0.45 | ) | $ | (1.17 | ) | $ | (1.54 | ) | ||||||||
| Consolidated Balance Sheets | |||||||||||
| (In Thousands, Except Per Share Amounts) | |||||||||||
| (Unaudited) | |||||||||||
| September 30, 2016 | December 31, 2015 | ||||||||||
| Assets | |||||||||||
| Goodwill | $ | 15,671 | $ | 16,052 | |||||||
| Intangible assets | 20,951 | 21,889 | |||||||||
| Property, plant and equipment | 2,001 | 3,043 | |||||||||
| Trade and other receivables | 171 | 176 | |||||||||
| Non-current assets | 38,794 | 41,160 | |||||||||
| Inventories | 8,942 | 6,462 | |||||||||
| Trade and other receivables | 4,576 | 4,168 | |||||||||
| Taxation recoverable | 1,974 | 1,618 | |||||||||
| Cash and cash equivalents | 9,857 | 32,332 | |||||||||
| Current assets | 25,349 | 44,580 | |||||||||
| Total assets | 64,143 | 85,740 | |||||||||
| Liabilities | |||||||||||
| Trade and other payables | 8,143 | 8,236 | |||||||||
| Current portion of borrowings | 2,642 | — | |||||||||
| Current liabilities | 10,785 | 8,236 | |||||||||
| Borrowings | 23,423 | 23,115 | |||||||||
| Deferred tax liabilities | 674 | 674 | |||||||||
| Contingent consideration | 11,597 | 10,600 | |||||||||
| Non-current liabilities | 35,694 | 34,389 | |||||||||
| Total Liabilities | 46,479 | 42,625 | |||||||||
| Net assets | $ | 17,664 | $ | 43,115 | |||||||
| Equity | |||||||||||
| Called up share capital | $ | 199 | $ | 199 | |||||||
| Share premium account | 63,853 | 63,853 | |||||||||
| Capital reorganization reserve | 205,686 | 205,686 | |||||||||
| Translation reserve | (1,782 | ) | 1,270 | ||||||||
| Accumulated loss | (250,292 | ) | (227,893 | ) | |||||||
| Total equity | $ | 17,664 | $ | 43,115 | |||||||
| Consolidated Statements of Changes in Equity | |||||||||||||||||||||||||||||||
| (In Thousands, Except Per Share Amounts) | |||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||
| SHARE CAPITAL | SHARE PREMIUM ACCOUNT | TRANSLATION RESERVE | CAPITAL REORGANIZATION RESERVE | ACCUMULATED LOSS | TOTAL EQUITY | ||||||||||||||||||||||||||
| At January 1, 2015 | $ | 162 | $ | 49,608 | $ | 2,245 | $ | 205,686 | $ | (192,868 | ) | $ | 64,833 | ||||||||||||||||||
| Loss for the period | — | — | — | — | (26,199 | ) | (26,199 | ) | |||||||||||||||||||||||
| Share-based compensation | — | — | — | — | 2,047 | 2,047 | |||||||||||||||||||||||||
| Issuance of ordinary shares | 37 | 14,245 | — | — | — | 14,282 | |||||||||||||||||||||||||
| Currency translation | — | — | (688 | ) | — | — | (688 | ) | |||||||||||||||||||||||
| At September 30, 2015 | $ | 199 | $ | 63,853 | $ | 1,557 | $ | 205,686 | $ | (217,020 | ) | $ | 54,275 | ||||||||||||||||||
| At January 1, 2016 | $ | 199 | $ | 63,853 | $ | 1,270 | $ | 205,686 | $ | (227,893 | ) | $ | 43,115 | ||||||||||||||||||
| Loss for the period | — | — | — | — | (23,343 | ) | (23,343 | ) | |||||||||||||||||||||||
| Share-based compensation | — | — | — | — | 944 | 944 | |||||||||||||||||||||||||
| Currency translation | — | — | (3,052 | ) | — | — | (3,052 | ) | |||||||||||||||||||||||
| At September 30, 2016 | $ | 199 | $ | 63,853 | $ | (1,782 | ) | $ | 205,686 | $ | (250,292 | ) | $ | 17,664 | |||||||||||||||||
| Consolidated Cash Flow Statements | |||||||||||
| (In Thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2016 | 2015 | ||||||||||
| Cash outflow from operating activities | |||||||||||
| Loss before taxation | $ | (23,919 | ) | $ | (27,850 | ) | |||||
| Depreciation and amortization of licenses, software and property, plant and equipment | 1,848 | 1,336 | |||||||||
| Share based compensation expense | 944 | 2,047 | |||||||||
| Loss on disposal of tangible assets | 36 | 66 | |||||||||
| Net finance expense/(income) | 1,396 | 477 | |||||||||
| Change in fair value of contingent liabilities | 997 | — | |||||||||
| Increase in inventories | (3,372 | ) | (917 | ) | |||||||
| Decrease in receivables | (833 | ) | (1,238 | ) | |||||||
| Increase/(decrease) in payables | 514 | (397 | ) | ||||||||
| Net cash used in operating activities | (22,389 | ) | (26,476 | ) | |||||||
| Research and development tax credits received / (income tax paid) | (17 | ) | 967 | ||||||||
| Net cash outflow from operating activities | (22,406 | ) | (25,509 | ) | |||||||
| Cash flows from investing activities | |||||||||||
| Interest received | 53 | 71 | |||||||||
| Purchase of property, plant and equipment | (260 | ) | (1,017 | ) | |||||||
| Proceeds from disposal of tangible assets | 104 | — | |||||||||
| Cash paid for acquisition | — | (200 | ) | ||||||||
| Purchase of intangible assets | — | (15 | ) | ||||||||
| Net cash flows used in investing activities | (103 | ) | (1,161 | ) | |||||||
| Cash flows from financing activities | |||||||||||
| Interest paid | (1,186 | ) | (325 | ) | |||||||
| Proceeds from issue of loan notes | 2,399 | 16,500 | |||||||||
| Loan notes transaction costs | — | (413 | ) | ||||||||
| Loan notes repaid | — | (5,331 | ) | ||||||||
| Net cash flows (used in)/from financing activities | 1,213 | 10,431 | |||||||||
| (Decrease)/increase in cash and cash equivalents | (21,296 | ) | (16,239 | ) | |||||||
| Cash and cash equivalents at beginning of period | 32,332 | 53,334 | |||||||||
| Effects of exchange rates on cash and cash equivalents | (1,179 | ) | (401 | ) | |||||||
| Cash and cash equivalents at end of period | $ | 9,857 | $ | 36,694 | |||||||