Apollo Endosurgery, Inc. Reports 28% Revenue Growth in Third Quarter Conference Call and Webcast to Discuss Results Today at 3:30 p.m. CT / 4:30 p.m. ET
Apollo Endosurgery announced its Q3 2021 results, reporting total revenues of $16.4 million, a 28% increase from Q3 2020. Key revenue drivers included a 34% surge in Endoscopic Suturing System sales and a 21% increase in Intragastric Balloon sales. The company achieved a gross margin of 56% and reported a net loss of $6.7 million. Apollo completed a $75 million equity offering to support growth. They anticipate full-year 2021 revenue between $63-$64 million but remain cautious due to potential COVID-19 impacts on elective procedures.
- Total revenue increased 28% year-over-year to $16.4 million.
- ESS revenue rose 34%, and IGB revenue grew 21% compared to Q3 2020.
- Gross margin improved to 56%, up from 55% in the prior year.
- Follow-on equity offering raised $75 million for growth investments.
- Year-to-date revenue from top 10 accounts increased 100% year-over-year.
- Net loss increased to $6.7 million from $2.6 million year-over-year.
- Total operating expenses rose by $5.2 million compared to Q3 2020.
- Non-GAAP adjusted EBITDA loss widened to $2.5 million from a loss of $0.3 million.
AUSTIN, TX / ACCESSWIRE / November 1, 2021 / Apollo Endosurgery, Inc. ("Apollo") (Nasdaq:APEN), a global leader in less invasive medical devices for gastrointestinal and bariatric procedures, today announced financial results for the third quarter ended September 30, 2021 and recent corporate highlights.
Third Quarter 2021 Selected Financial Results
- Total revenue of
$16.4 million , an increase of28% compared to the third quarter of 2020 - Endoscopic Suturing System (ESS) revenue increased
34% and Intragastric Balloon (IGB) revenue increased21% compared to the third quarter of 2020 - Gross margin of
56% - Pro forma cash of
$98.3 million , including net proceeds from October 2021 follow-on offering
Recent Corporate Highlights
- Announced that investigators of the Multi-Center ESG Randomized Interventional (MERIT) study reported data from the MERIT-Trial, which met its primary endpoints for safety and efficacy, with patients undergoing the Endoscopic Sleeve Gastroplasty (ESG) procedure achieving excess body weight loss of
49.2% at 12 months, improvements in weight-related comorbidities, and a serious adverse event rate of2% ; - Submitted a De Novo classification request to the U.S. Food and Drug Administration seeking 510(k) classification and clearance for the Apollo ESGTM and Apollo REVISETM devices;
- Grew year-to-date revenue from Apollo's top 10 direct accounts by
100% compared to 2020; - Continued X-Tack penetration in key accounts, with over
70% of third quarter 2021 revenue from repeat orders; - Closed a follow-on equity offering that generated net proceeds of approximately
$69.9 million to support continued growth-related investments and expand the institutional shareholder base; and - Announced the publication of a multi-center study of Apollo's X-Tack System, demonstrating high success rates, ease of use, and economic value in the treatment of GI defects.
"In the third quarter, we continued to build momentum and energize our business in the U.S. and overseas, delivering strong financial performance for both revenue and gross margin," said Chas McKhann, Apollo's president and CEO. "Our recently completed follow-on financing enables us to thoughtfully invest in advancing large-scale opportunities to expand our addressable markets. For example, our recent De Novo 510(k) classification request for Apollo ESG and Apollo REVISE is based on well documented therapeutic solutions in categories where patients are increasingly seeking effective but less invasive alternatives. We are building a foundation for long-term value creation here at Apollo."
Third Quarter Results
Total revenues of
Compared to the third quarter of 2020, total ESS product sales increased
Gross margin increased to
Total operating expenses increased
Net loss for the third quarter of 2021 was
Non-GAAP adjusted EBITDA, which excludes interest, taxes, depreciation, amortization, unrealized foreign exchange and stock-based compensation, in the third quarter 2021 was a loss of
Cash, cash equivalents and restricted cash were
In October, the Company completed a follow-on equity offering of 9,660,000 shares for gross proceeds of
2021 Financial Outlook
Apollo expects full year 2021 revenue between
Conference Call
Apollo will host a live webcast audio call with slides today at 3:30 p.m. CT / 4:30 p.m. ET. Investors are invited to join the live call via webcast from the Investors section of the Company's corporate website at www.apolloendo.com. An audio-only option is available is available by dialing +1-973-528-0011 and referencing "Apollo Endosurgery Third Quarter 2021 Earnings Call." Investors who opt for audio-only will need to download the related slides at www.apolloendo.com.
A replay of the webcast will be made available on Apollo's website, www.apolloendo.com, shortly after completion of the call.
Non-GAAP Financial Measures
To supplement the Company's financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company reports certain non-GAAP financial measures, including non-GAAP Adjusted EBITDA and non-GAAP product sales percentage change in constant currency. Adjusted EBITDA is calculated as GAAP net loss, plus depreciation and amortization, interest expense, net, income tax expense, stock-based compensation and unrealized foreign exchange. Product sales percentage change in constant currency is calculated by translating current foreign currency sales at last year's exchange rate. These supplemental measures of our performance are not required by, and are not determined in accordance with GAAP. The Company believes that these non-GAAP financial measures provide investors with an additional tool for evaluating the Company's core performance, which management uses in its own evaluation of continuing operating performance, and a baseline for assessing the future earnings potential of the Company. The Company's non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company's industry, as other companies in the industry may calculate non-GAAP financial results differently. Non-GAAP financial results should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Included in the supplemental tables to this press release is a reconciliation of non-GAAP adjusted EBITDA to GAAP net loss.
About Apollo Endosurgery, Inc.
Apollo Endosurgery, Inc. is a medical technology company focused on development of next-generation, less invasive devices to advance therapeutic endoscopy designed to treat a variety of gastrointestinal conditions including closure of gastrointestinal defects, managing gastrointestinal complications and the treatment of obesity. Apollo's device-based therapies are an alternative to invasive surgical procedures, thus lowering complication rates and reducing total healthcare costs. Apollo's products are offered in over 75 countries today and include the OverStitch® Endoscopic Suturing System, the OverStitch Sx® Endoscopic Suturing System, X-Tack® Endoscopic HeliX Tacking System and the ORBERA® Intragastric Balloon.
Apollo's common stock is traded on the Nasdaq Global Market under the symbol "APEN". For more information regarding Apollo Endosurgery, go to: www.apolloendo.com.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it may have on the Company's operations, the Company's financial outlook for future periods, the demand for the Company's products, the Company's liquidity position, global supply chains and economic activity in general. Important factors that could cause actual results to differ materially include: reports of adverse events related to our products, outcomes of clinical studies related to our products, development of competitive medical products by competitors, regulatory approvals and extensive regulatory oversight by the FDA or other regulatory authorities, unfavorable media coverage related to our products or related procedures, coverage and reimbursement decisions by private or government payors, Apollo's ability to support the adoption of its products and broaden its product portfolio; the potential size of Apollo's addressable markets; the execution of our gross margin improvement projects; the ability to collect future payments from ReShape; and the availability of cash for Apollo's future operations as well as other factors detailed in Apollo's periodic reports filed with the Securities and Exchange Commission, or SEC, including its Form 10-K for the year ended December 31, 2020 and its Form 10-Q for the period ended September 30, 2021. Copies of reports filed with the SEC are posted on Apollo's website and are available from Apollo without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, Apollo disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
Disclosure Information
Apollo uses the investor relations section of its website as a means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors monitor Apollo's investor relations website in addition to following Apollo's press releases, SEC filings, and public conference calls and webcasts.
Contacts
Apollo Endosurgery, Inc.
investor-relations@apolloendo.com
Darrow Associates Investor Relations
Matt Kreps, 214-597-8200
mkreps@darrowir.com
APOLLO ENDOSURGERY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except for share data)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenues | $ | 16,351 | $ | 12,826 | $ | 46,818 | $ | 29,188 | ||||||||
Cost of sales | 7,124 | 5,840 | 20,961 | 14,136 | ||||||||||||
Gross margin | 9,227 | 6,986 | 25,857 | 15,052 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 6,123 | 4,178 | 16,918 | 12,773 | ||||||||||||
General and administrative | 4,574 | 2,374 | 13,981 | 7,870 | ||||||||||||
Research and development | 2,567 | 1,522 | 7,045 | 5,484 | ||||||||||||
Amortization of intangible assets | 467 | 486 | 1,412 | 1,472 | ||||||||||||
Total operating expenses | 13,731 | 8,560 | 39,356 | 27,599 | ||||||||||||
Loss from operations | (4,504 | ) | (1,574 | ) | (13,499 | ) | (12,547 | ) | ||||||||
Other (income) expenses: | ||||||||||||||||
Interest expense, net | 1,342 | 1,335 | 4,028 | 3,895 | ||||||||||||
Gain on forgiveness of PPP loan | - | - | (2,852 | ) | - | |||||||||||
Other (income) expense, net | 721 | (353 | ) | (618 | ) | 2,574 | ||||||||||
Net loss before income taxes | (6,567 | ) | (2,556 | ) | (14,057 | ) | (19,016 | ) | ||||||||
Income tax expense | 90 | 41 | 220 | 90 | ||||||||||||
Net loss | $ | (6,657 | ) | $ | (2,597 | ) | $ | (14,277 | ) | $ | (19,106 | ) | ||||
Net loss per share, basic and diluted | $ | (0.23 | ) | $ | (0.11 | ) | $ | (0.52 | ) | $ | (0.88 | ) | ||||
Shares used in computing net loss per share, basic and diluted | 29,020,443 | 23,110,524 | 27,542,182 | 21,798,336 | ||||||||||||
APOLLO ENDOSURGERY, INC. AND SUBSIDIARIES
Product Sales by Product Group and Geographic Market
Unaudited (In thousands)
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | % Increase/ (Decrease) | |||||||||||||||||||||||||||||
| U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | |||||||||||||||||||||||
ESS | $ | 6,722 | $ | 3,504 | $ | 10,226 | $ | 4,734 | $ | 2,928 | $ | 7,662 | 42.0 | % | 19.7 | % | 33.5 | % | |||||||||||||
IGB | 2,006 | 3,890 | 5,896 | 1,853 | 3,021 | 4,874 | 8.3 | % | 28.8 | % | 21.0 | % | |||||||||||||||||||
Other | 215 | 14 | 229 | 272 | 18 | 290 | (21.0 | )% | (22.2 | )% | (21.0 | )% | |||||||||||||||||||
Total revenues | $ | 8,943 | $ | 7,408 | $ | 16,351 | $ | 6,859 | $ | 5,967 | $ | 12,826 | 30.4 | % | 24.1 | % | 27.5 | % | |||||||||||||
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | % Increase/ (Decrease) | ||||||||||||||||||||||||||||
| U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | ||||||||||||||||||||||
ESS | $ | 18,977 | $ | 10,512 | $ | 29,489 | $ | 10,873 | $ | 7,211 | $ | 18,084 | 74.5 | % | 45.8 | % | 63.1 | % | ||||||||||||
IGB | 5,570 | 11,042 | 16,612 | 3,511 | 6,688 | 10,199 | 58.6 | % | 65.1 | % | 62.9 | % | ||||||||||||||||||
Other | 689 | 28 | 717 | 854 | 51 | 905 | (19.3 | )% | (45.1 | )% | (20.8 | )% | ||||||||||||||||||
Total revenues | $ | 25,236 | $ | 21,582 | $ | 46,818 | $ | 15,238 | $ | 13,950 | $ | 29,188 | 65.6 | % | 54.7 | % | 60.4 | % | ||||||||||||
Non-GAAP product sales percentage change in constant currency were as follows:
| Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||||||||
| % Increase/Decrease in Constant Currency | % Increase/Decrease in Constant Currency | |||||||||||||
| OUS | Total Revenues | OUS | Total Revenues | |||||||||||
ESS | 18.2 | % | 32.9 | % | 40.3 | % | 60.9 | % | ||||||
IGB | 26.7 | % | 19.7 | % | 58.2 | % | 58.4 | % | ||||||
Total revenues | 22.4 | % | 26.7 | % | 47.9 | % | 49.2 | % | ||||||
APOLLO ENDOSURGERY, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Adjusted EBITDA
Unaudited (In millions)
| Three Months Ended September 30, | |||||||
(Numbers in millions) | 2021 | 2020 | |||||
Net loss | $ | (6.7 | ) | $ | (2.6 | ) | |
Depreciation and amortization | 0.8 | 0.9 | |||||
Interest expense, net | 1.3 | 1.3 | |||||
Income tax expense | 0.1 | - | |||||
EBITDA | (4.5 | ) | (0.4 | ) | |||
Add back significant items: | |||||||
Stock-based compensation | 1.5 | 0.6 | |||||
Unrealized foreign exchange | 0.5 | (0.5 | ) | ||||
Adjusted EBITDA | $ | (2.5 | ) | $ | (0.3 | ) | |
SOURCE: Apollo Endosurgery, Inc.
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FAQ
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