Avinger Reports Fourth Quarter 2020 Financial Results

Rhea-AI Summary

Avinger reported a strong performance in Q4 2020, with total revenue increasing by 19% sequentially to $2.7 million, the highest in three years. Image-guided CTO revenue surged 38% due to the limited launch of the new Tigereye device. Gross margin improved to 36%, and nine new Lumivascular accounts were opened. Despite a net loss of $4.6 million, Avinger ended the year with $22.2 million in cash, bolstered by an additional $13 million raised in early 2021. The company is set to launch new products and expand into the CAD market in 2021.

Positive

• 19% sequential revenue growth to $2.7 million, highest in 3 years
• 38% sequential growth in image-guided CTO revenue
• Gross margin rose to 36%, highest in 4 years
• Opened 9 new Lumivascular accounts in Q4 2020, total of 36 for the year
• Strengthened cash position with $35 million post-offering

Negative

• Net loss of $4.6 million, slightly higher than Q3 2020
• Operating expenses increased to $5.2 million, up from $4.9 million in Q3 2020

19% Sequential Increase in Total Revenue

Tigereye™ Drives 38% Sequential Growth in Image-Guided CTO Revenue

REDWOOD CITY, CA / ACCESSWIRE / March 11, 2021 / Avinger, Inc. (NASDAQ: AVGR), a commercial-stage medical device company marketing the first and only intravascular image-guided, catheter-based system for diagnosis and treatment of Peripheral Artery Disease (PAD), today reported results for the fourth quarter ended December 31, 2020.

Fourth Quarter and Recent Highlights

• Revenue increased 19% sequentially to $2.7 million, the highest level in 3 years
• Image-guided CTO revenue increased 38% sequentially, driven by limited launch of the new Tigereye™ device
• Gross margin rose sequentially to 36%, reflecting increased sales activity and cost efficiency
• Opened 9 new Lumivascular accounts in the fourth quarter, bringing total new accounts for the full year to 36
• Progressed Tigereye to full commercial launch in January 2021, following successful limited launch in the fourth quarter
• Improved the terms of Avinger's existing loan agreement in January 2021, including the extension of the maturity date to 2025
• Ended December 31, 2020 with cash on hand of $22.2 million and added approximately $13 million in net proceeds from a common stock offering in February 2021

Jeff Soinski, Avinger's President and CEO, commented, "Avinger remains focused on driving top-line growth by introducing new products, launching new accounts and expanding utilization at existing sites. In January, we progressed to full commercial launch of Tigereye, our next generation CTO-crossing device, following completion of a successful limited launch program in the fourth quarter. Patient outcomes are compelling as more and more sites complete their first cases with this new device, demonstrating the benefits of Tigereye's enhanced imaging, steerability and new distal tip design in a real-world clinical setting."

"We enter 2021 in a strong competitive position with three next generation products launched over the past three years, a leaner operating cost structure, a more capable commercial organization and a strengthened balance sheet. We are also investing in future growth drivers, including our next generation Lightbox 3 slated for 510(k) submission by mid-year, additional new PAD catheter solutions, the expansion of our field sales team and advancement of our clinical efforts in support of expanded use and reimbursement. In addition, we are in the first stages of expanding into the coronary artery disease (CAD) market by developing proprietary new product applications of our Tigereye technology for the treatment of chronic total occlusions in this challenging and underserved market."

Fourth Quarter 2020 Financial Results

Total revenue was $2.7 million for the fourth quarter of 2020, an increase of 19% from the third quarter of 2020, and an increase of 7% from the fourth quarter of 2019. The sequential increase in revenue reflected sales during the limited launch of Avinger's Tigereye CTO crossing catheter and continued recovery from the effects of the COVID-19 pandemic.

Gross margin for the fourth quarter of 2020 was 36%, an increase of 200 basis points from 34% in the third quarter of 2020 and the highest gross margin level in the last 4 years. Operating expenses for the fourth quarter of 2020 were $5.2 million, compared with $4.9 million in the third quarter of 2020, due to expansion of the commercial team and launch of Tigereye. Fourth quarter operating expenses decreased 12% from $5.9 million in the fourth quarter of 2019.

Net loss and comprehensive loss for the fourth quarter of 2020 was $4.6 million, compared with $4.5 million in the third quarter of 2020 and $5.1 million in the fourth quarter of 2019.

Adjusted EBITDA, as defined under non-GAAP measures in this press release, was a loss of $3.7 million, compared with a loss of $3.5 million in the third quarter of 2020, and a loss of $4.1 million in the fourth quarter of 2019.

For more information regarding non-GAAP financial measures discussed in this press release, please see "Non-GAAP Financial Measures" below, as well as the reconciliation of GAAP to non-GAAP measures provided in the tables below.

Balance Sheet

Cash and cash equivalents totaled $22.2 million as of December 31, 2020, compared with $25.3 million as of September 30, 2020. Subsequent to December 31, 2020, Avinger raised approximately $13.0 million in net proceeds from a bought deal offering, providing a cash balance of over $35 million when added to the Company's year-end cash position. Avinger amended the existing loan agreement in January 2021, including the extension of the interest only period and maturity date of the term loan by 2 ½ years. The interest only period is extended from June 30, 2021 to December 31, 2023. The maturity date is extended from June 30, 2023 to December 31, 2025. In addition, the amendment reset the material adverse change representation date and adjusted the minimum revenue requirements.

Conference Call

Avinger will hold a conference call today, March 11, 2021 at 4:30pm ET to discuss its fourth quarter 2020 financial results.

Individuals interested in listening to the conference call may do so by dialing +1-201-689-8031. To listen to a live webcast, please visit http://www.avinger.com and select Investor Relations. A webcast replay of the call will be available on Avinger's website following completion of the call at www.avinger.com.

About Avinger, Inc.

Avinger is a commercial-stage medical device company that designs and develops the first and only image-guided, catheter-based system for the diagnosis and treatment of patients with Peripheral Artery Disease (PAD). PAD is estimated to affect over 12 million people in the U.S. and over 200 million worldwide. Avinger is dedicated to radically changing the way vascular disease is treated through its Lumivascular platform, which currently consists of the Lightbox imaging console, the Ocelot and Tigereye™ family of chronic total occlusion (CTO) catheters, and the Pantheris® family of atherectomy devices. Avinger is based in Redwood City, California. For more information, please visit www.avinger.com.

Follow Avinger on Twitter and Facebook.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our future performance, patient benefits of our products, including Tigereye, the development and regulatory of other products, including Lightbox 3, and our ability to expand into the CAD market. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include our dependency on a limited number of products; the resource requirements related to Pantheris, TIGEREYE and our Lightbox imaging console; the outcome of clinical trial results; as well as the other risks described in the section entitled "Risk Factors" and elsewhere in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2020, and subsequent Form 10-Qs. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. Avinger disclaims any obligation to update these forward-looking statements.

Non-GAAP Financial Measures

Avinger has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The Company uses these non-GAAP financial measures internally in analyzing its financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing the Company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's financial statements prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.

Adjusted EBITDA. Avinger defines Adjusted EBITDA as net loss and comprehensive loss plus interest expense, net, plus other income, net, plus stock-based compensation expense plus certain inventory charges plus certain depreciation and amortization expense. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures as analytical tools. Furthermore, these non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and the components that Avinger excludes in its calculation of non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP results of operations. Avinger compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. In the future, the Company may also exclude other non-recurring expenses and other expenses that do not reflect the Company's core business operating results.

Investor Contact:

Mark Weinswig
Chief Financial Officer
Avinger, Inc.
(650) 241-7916
ir@avinger.com

Matt Kreps
Darrow Associates Investor Relations
(214) 597-8200
mkreps@darrowir.com

Statements of Operations and Comprehensive Loss

(in thousands) (unaudited)

		For the Three Months Ended												Twelve Months Ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2020				2020				2019				2020				2019
Revenue		$	2,732			$	2,302			$	2,562			$	8,761			$	9,131
Cost of revenue			1,751				1,525				1,635				6,143				6,264
Gross profit			981				777				927				2,618				2,867
Operating expense
Research and development			1,387				1,417				1,572				5,695				5,692
Selling, general, and administrative			3,826				3,461				4,366				14,327				16,534
Total operating expense			5,213				4,878				5,938				20,022				22,226
Operating loss			(4,232	)			(4,101	)			(5,011	)			(17,404	)			(19,359	)
Other (expense) income, net:
Interest expense, net			(446	)			(432	)			(343	)			(1,658	)			(1,192	)
Other income (expense), net			48				8				233				56				1,101
Net loss and comprehensive loss			(4,630	)			(4,525	)			(5,121	)			(19,006	)			(19,450	)
Accretion of preferred stock dividends			(965	)			(967	)			(895	)			(3,866	)			(3,580	)
Net loss attributable to common stockholders		$	(5,595	)		$	(5,492	)		$	(6,016	)		$	(22,872	)		$	(23,030	)
Net loss per share attributable to common stockholders
basic and diluted		$	(0.07	)		$	(0.08	)		$	(0.58	)		$	(0.46	)		$	(3.18	)
Weighted average common shares used to compute
net loss per share, basic and diluted			84,923				69,459				10,354				49,231				7,239

Balance Sheets

(in thousands, except per share amounts)

			December 31,				December 31,
Assets			2020				2019
Current assets:
	Cash and cash equivalents		$	22,185			$	10,943
	Accounts receivable, net of allowance for doubtful accounts of $19
	at both December 31, 2020 and 2019			1,484				1,458
	Inventories			3,876				3,912
	Prepaid expenses and other current assets			350				311
	Total current assets			27,895				16,624
Right of use asset				4,063				4,856
Property and equipment, net				727				1,661
Other assets				510				684
	Total assets		$	33,195			$	23,825
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable		$	694			$	663
	Accrued compensation			1,703				1,782
	Accrued expenses and other current liabilities			669				654
	Leasehold liability, current portion			806				722
	Borrowings, current portion			3,590				8,967
	Total current liabilities			7,462				12,788
Leasehold liability, long-term portion				3,257				4,135
Borrowings, long-term portion				9,400				-
Other long-term liabilities				-				7
	Total liabilities			20,119				16,930
Stockholders' equity:
	Convertible preferred stock, par value $0.001			-				-
	Common stock, par value $0.001			85				10
	Additional paid-in capital			380,332				355,220
	Accumulated deficit			(367,341	)			(348,335	)
	Total stockholders' equity			13,076				6,895
	Total liabilities and stockholders' equity		$	33,195			$	23,825

Reconciliation of Adjusted EBITDA to Net loss and comprehensive loss

(in thousands) (unaudited)

		For the Three Months Ended												For the Twelve Months Ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2020				2020				2019				2020				2019
Net loss and comprehensive loss		$	(4,630	)		$	(4,525	)		$	(5,121	)		$	(19,006	)		$	(19,450	)
Add: Interest expense, net			446				432				343				1,658				1,192
Add: Other (income) expense, net			(48	)			(8	)			(233	)			(56	)			(1,101	)
Add: Stock-based compensation			353				384				559				1,513				2,091
Add: Certain inventory charges			-				-				92				-				92
Add: Certain depreciation and amortization charges			221				223				236				897				890
Adjusted EBITDA		$	(3,658	)		$	(3,494	)		$	(4,124	)		$	(14,994	)		$	(16,286	)

SOURCE: Avinger, Inc.

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FAQ

What was Avinger's total revenue for Q4 2020?

Avinger's total revenue for Q4 2020 was $2.7 million, reflecting a 19% increase sequentially.

How much cash did Avinger have at the end of Q4 2020?

Avinger had $22.2 million in cash at the end of Q4 2020.

What are the highlights of Avinger's Tigereye device?

The Tigereye device saw a 38% sequential revenue growth and is noted for its enhanced imaging and steerability.

What was Avinger's gross margin for Q4 2020?

Avinger's gross margin for Q4 2020 was 36%, the highest level in four years.

What future developments are planned for Avinger in 2021?

In 2021, Avinger plans to launch new products, expand into the CAD market, and increase its field sales team.