Apollo Endosurgery, Inc. Reports Fourth Quarter and Full Year 2020 Results
Apollo Endosurgery (NASDAQ:APEN) reported its fourth quarter financial results for 2020, showing a 14.9% increase in U.S. Endoscopy product sales and a 7.3% rise in total revenue to $12.9 million compared to Q4 2019. The company reduced its net operating loss by 53% to $3.2 million and improved cash utilization by 58.1%. Additionally, Apollo received FDA clearance for the X-Tack Endoscopic HeliX Tacking System, enhancing its product portfolio. Total operating expenses decreased by $2.3 million due to restructuring efforts, while gross margin improved to 55.9%.
- Fourth quarter U.S. Endoscopy product sales increased 14.9%.
- Total revenue rose 7.3% to $12.9 million in Q4 2020.
- Net operating loss decreased to $3.2 million, a 53% reduction from Q4 2019.
- Cash utilization improved by 58.1% compared to the fourth quarter of 2019.
- FDA clearance for the X-Tack Endoscopic HeliX Tacking System adds a new product to the portfolio.
- Gross margin increased to 55.9% from 48.7% in Q4 2019.
- Total operating expenses decreased by $2.3 million.
- None.
Conference Call to Discuss Results Today at 3:30 p.m. CT / 4:30 p.m. ET
AUSTIN, TX / ACCESSWIRE / February 25, 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 fourth quarter and year ended December 31, 2020. The Company will hold a conference call today at 3:30 p.m. CT / 4:30 p.m. ET to discuss its results.
Highlights
- Fourth quarter U.S. Endoscopy product sales increased
14.9% - Net operating loss in the fourth quarter was
$3.2 million , a53.0% reduction from the$6.9 million net operating loss in the fourth quarter of 2019 - Operations used
$2.8 million of cash in the fourth quarter of 2020, a58.1% improvement compared to$6.7 million used in the fourth quarter of 2019 - Received FDA clearance for the X-Tack ™ Endoscopic HeliX Tacking system
Todd Newton, CEO of Apollo, said, "Our revenue in the fourth quarter reflected a continuing recovery of US market procedure volumes. This recovery combined with our cost reduction efforts resulted in a pronounced improvement in our profitability and cash utilization in the fourth quarter, providing a solid foundation as we transition leadership to Apollo's next CEO, Chas McKhann."
"In addition the 510k clearance of our X-Tack™ Endoscopic HeliX Tacking System in December adds a new product to our portfolio and opens for our suturing franchise a new and significant addressable market in the lower gastrointestinal tract," said Newton. "With over 20 million lower gastrointestinal tract endoscopic procedures performed annually in the U.S., X-Tack fulfills a long-expressed need for a readily-available advanced closure device to improve healing and reduce adverse event risks."
Total worldwide revenue increased
ESS product sales increased
IGB product sales increased
Gross margin for the fourth quarter of 2020 was
Total operating expenses decreased
Net loss for the fourth quarter of 2020 was
Cash, cash equivalents and restricted cash were
In December 2020, the Company entered into an agreement with Solar Capital Ltd. to extend the interest only period and maturity date of its existing term loan by 12 months, improving the Company's 2021 liquidity by approximately
Conference Call
Apollo will host a conference call on February 25, 2021 at 3:30 p.m. Central Time / 4:30 p.m. Eastern Time to discuss Apollo's operating results for the fourth quarter and year ended December 31, 2020. To join the conference call dial +1 973-528-0011. A live webcast of the conference call will be made available on the "Events and Presentations" section of our Investor Relations website: ir.apolloendo.com.
A replay of the webcast will remain available on Apollo's website, www.apolloendo.com, following the call.
Non-GAAP Financial Measures
To supplement our financial results, we are providing a non-GAAP financial measure, Endoscopy product sales percentage change in constant currency, which removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of revenues compared to the same period of the prior year. Endoscopy product sales percentage change in constant currency is calculated by translating current foreign currency sales at last year's exchange rate. This supplemental measure of our performance is not required by, and is not determined in accordance with GAAP.
We believe the non-GAAP financial measure included herein is helpful in understanding our current financial performance. We use this supplemental non-GAAP financial measure internally to understand, manage and evaluate our business, and make operating decisions. We believe that making non-GAAP financial information available to investors, in addition to GAAP financial information, may facilitate more consistent comparisons between the company's performance over time with the performance of other companies in the medical device industry, which may use similar financial measures to supplement their GAAP financial information. However, our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for the comparable GAAP metric.
About Apollo Endosurgery, Inc.
Apollo Endosurgery, Inc. is a medical technology company focused on the development of next-generation, less invasive devices to advance gastrointestinal 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-TackTM Endoscopic HeliX Tacking System and the ORBERA® Intragastric Balloon.
Apollo's common stock is traded on 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 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: the advancement of Apollo products; development of enhancements to Apollo's existing products and technologies; market acceptance of Apollo's products; the potential size of Apollo's addressable markets; the execution of our gross margin improvement projects; the ability to collect future payments from ReShape; statements relating to the availability of cash for Apollo's future operations; and Apollo's ability to support the adoption of its products and broaden its product portfolio 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. 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 should 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.
Stefanie Cavanaugh, 512-279-5100
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)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Revenues | $ | 12,860 | $ | 11,989 | $ | 42,048 | $ | 50,713 | ||||||||
Cost of sales | 5,670 | 6,154 | 19,806 | 25,038 | ||||||||||||
Gross margin | 7,190 | 5,835 | 22,242 | 25,675 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 4,582 | 6,735 | 17,355 | 28,730 | ||||||||||||
General and administrative | 3,192 | 3,369 | 11,062 | 13,588 | ||||||||||||
Research and development | 2,186 | 2,139 | 7,670 | 10,384 | ||||||||||||
Amortization of intangible assets | 477 | 504 | 1,949 | 2,095 | ||||||||||||
Settlement gain | - | - | - | (5,609 | ) | |||||||||||
Total operating expenses | 10,437 | 12,747 | 38,036 | 49,188 | ||||||||||||
Loss from operations | (3,247 | ) | (6,912 | ) | (15,794 | ) | (23,513 | ) | ||||||||
Other expenses: | ||||||||||||||||
Interest expense, net | 1,356 | 1,203 | 5,251 | 4,052 | ||||||||||||
Other (income) expense | (1,150 | ) | (1,063 | ) | 1,424 | (408 | ) | |||||||||
Net loss before income taxes | (3,453 | ) | (7,052 | ) | (22,469 | ) | (27,157 | ) | ||||||||
Income tax expense | 52 | 144 | 142 | 275 | ||||||||||||
Net loss | $ | (3,505 | ) | $ | (7,196 | ) | $ | (22,611 | ) | $ | (27,432 | ) | ||||
Net loss per share, basic and diluted | $ | (0.14 | ) | $ | (0.34 | ) | $ | (0.99 | ) | $ | (1.27 | ) | ||||
Shares used in computing net loss per share, basic and diluted (1) | 25,608,839 | 20,946,035 | 22,756,167 | 21,542,284 | ||||||||||||
(1) 2.5 million and 2.1 million common shares were issued in July 2020 and October 2020, respectively.
APOLLO ENDOSURGERY, INC. AND SUBSIDIARIES
Product Sales by Product Group and Geographic Market
Unaudited (In thousands)
Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||||
U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | ||||||||||||||||||||||||||||
ESS | $ | 4,901 | $ | 2,744 | $ | 7,645 | $ | 4,446 | $ | 3,026 | $ | 7,472 | 10.2 | % | (9.3 | )% | 2.3 | % | ||||||||||||||||||
IGB | 1,535 | 3,050 | 4,585 | 1,157 | 3,126 | 4,283 | 32.7 | % | (2.4 | )% | 7.1 | % | ||||||||||||||||||||||||
Total Endoscopy | 6,436 | 5,794 | 12,230 | 5,603 | 6,152 | 11,755 | 14.9 | % | (5.8 | )% | 4.0 | % | ||||||||||||||||||||||||
% Endoscopy | 52.6 | % | 47.4 | % | 47.7 | % | 52.3 | % | ||||||||||||||||||||||||||||
Surgical | - | - | - | - | 42 | 42 | - | % | (100.0 | )% | (100.0 | )% | ||||||||||||||||||||||||
Other (1) | 599 | 31 | 630 | 183 | 9 | 192 | 227.3 | % | 244.4 | % | 228.1 | % | ||||||||||||||||||||||||
Total revenues | $ | 7,035 | $ | 5,825 | $ | 12,860 | $ | 5,786 | $ | 6,203 | $ | 11,989 | 21.6 | % | (6.1 | )% | 7.3 | % | ||||||||||||||||||
(1) Other U.S. revenue includes
Year Ended December 31, 2020 | Year Ended December 31, 2019 | % Increase / (Decrease) | ||||||||||||||||||||||||||||||||||
U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | ||||||||||||||||||||||||||||
ESS | $ | 15,774 | $ | 9,955 | $ | 25,729 | $ | 14,944 | $ | 13,365 | $ | 28,309 | 5.6 | % | (25.5 | )% | (9.1 | )% | ||||||||||||||||||
IGB | 5,045 | 9,739 | 14,784 | 5,162 | 11,678 | 16,840 | (2.3 | )% | (16.6 | )% | (12.2 | )% | ||||||||||||||||||||||||
Total Endoscopy | 20,819 | 19,694 | 40,513 | 20,106 | 25,043 | 45,149 | 3.5 | % | (21.4 | )% | (10.3 | )% | ||||||||||||||||||||||||
% Endoscopy | 51.4 | % | 48.6 | % | 44.5 | % | 55.5 | % | ||||||||||||||||||||||||||||
Surgical | - | - | - | - | 3,712 | 3,712 | - | % | (100.0 | )% | (100.0 | )% | ||||||||||||||||||||||||
Other (1) | 1,453 | 82 | 1,535 | 1,815 | 37 | 1,852 | (19.9 | )% | 121.6 | % | (17.1 | )% | ||||||||||||||||||||||||
Total revenues | $ | 22,272 | $ | 19,776 | $ | 42,048 | $ | 21,921 | $ | 28,792 | $ | 50,713 | 1.6 | % | (31.3 | )% | (17.1 | )% | ||||||||||||||||||
(1) Other U.S. revenue includes
Non-GAAP Endoscopy product sales percentage change in constant currency were as follows:
Three Months Ended December 31, 2020 | Year Ended December 31, 2020 | |||||||||||||||
% Increase/Decrease in Constant Currency | % Increase/Decrease in Constant Currency | |||||||||||||||
OUS | Total Revenues | OUS | Total Revenues | |||||||||||||
ESS | (8.4 | )% | 2.7 | % | (24.0 | )% | (8.4 | )% | ||||||||
IGB | (5.2 | )% | 5.0 | % | (16.9 | )% | (12.4 | )% | ||||||||
Total Endoscopy | (6.8 | )% | 3.5 | % | (20.7 | )% | (9.9 | )% | ||||||||
SOURCE: Apollo Endosurgery, Inc.
View source version on accesswire.com:
https://www.accesswire.com/631877/Apollo-Endosurgery-Inc-Reports-Fourth-Quarter-and-Full-Year-2020-Results
FAQ
What were Apollo Endosurgery's Q4 2020 financial results?
How did Apollo Endosurgery's U.S. Endoscopy product sales perform in Q4 2020?
What is the significance of the X-Tack Endoscopic HeliX Tacking System for Apollo?
What was the cash position of Apollo Endosurgery at the end of 2020?
How did Apollo Endosurgery's operating expenses change in Q4 2020?
