electroCore Announces Fourth Quarter and Full Year 2023 Financial Results
- Significant increase in net sales for electroCore, Inc. (ECOR) in 2023, reaching $16.0 million, an 87% growth over 2022.
- Revenue growth seen across major channels, including prescription gammaCore devices and nonprescription products.
- Gross profit for 2023 was $13.2 million with a gross margin of 83%, up from $7.0 million and 81% in 2022.
- Operating expenses increased to approximately $32.5 million in 2023 compared to $29.9 million in 2022.
- Research and development expenses decreased to $5.3 million in 2023 due to cost-cutting measures.
- GAAP net loss for 2023 was $18.8 million, an improvement from the $22.2 million net loss in 2022.
- Adjusted EBITDA net loss improved in Q4 2023 to $2.9 million from $4.7 million in Q4 2022.
- Net cash used in operating activities decreased to $14.7 million in 2023 from $16.6 million in 2022.
- Cash position decreased from $18.0 million in 2022 to $10.6 million in 2023, despite raising $7.5 million through a direct offering in July 2023.
- Decrease in cash position from $18.0 million in 2022 to $10.6 million in 2023 despite raising $7.5 million through a direct offering in July 2023.
Insights
An 87% increase in net sales for electroCore is a significant leap, indicative of a robust demand for the company's bioelectronic medicine and wellness products. The gross margin improvement from 81% to 83% suggests that the company is effectively managing its cost of goods sold (COGS), a key indicator of operational efficiency and profitability. However, the reported GAAP net loss of $18.8 million, despite being an improvement over the previous year's $22.2 million, raises concerns about the company's current profitability and cash burn rate.
Investors should note the company's cash position which decreased from $18.0 million to $10.6 million year-over-year, signaling a substantial cash burn despite the capital raised in July. This trend, if sustained, could lead to future liquidity challenges or the need for additional funding, which might dilute current shareholders or impose additional debt burdens.
Adjusted EBITDA net loss figures are often scrutinized as they exclude certain expenses that are nonetheless real costs to the business. The improvement in adjusted EBITDA net loss from $19.0 million to $15.4 million indicates some level of cost control, but stakeholders should be wary of overreliance on these figures for a true health assessment of the company.
The substantial revenue growth in the prescription gammaCore segment, particularly from the VA/DoD channel, suggests that electroCore is gaining traction within the governmental healthcare sector, which is a promising sign for future contracts and stability. The expansion in international sales and the successful introduction of nonprescription products like Truvaga and TAC-STIM also highlight the company's diversification strategy and potential for market expansion.
However, the slight decrease in U.S. commercial sales of Rx gammaCore raises questions about market saturation or competitive pressures in the domestic market. It is important to analyze the company's marketing strategies and customer acquisition costs to ensure that the increased spending in these areas is yielding proportional benefits.
Investors should consider the company's product pipeline and any upcoming regulatory milestones that could significantly impact future sales. The R&D investments mentioned by the company in smart phone-integrated therapies could represent a strategic move to capitalize on the growing digital health market.
The performance of electroCore's medical devices, such as gammaCore, is a testament to the increasing acceptance and integration of bioelectronic medicine into treatment paradigms. The technology's non-invasive nature and application in various conditions, including migraine and cluster headache, may be driving its adoption. The company's ability to maintain a high gross margin suggests that its products have a competitive edge in terms of cost-effectiveness and value proposition to healthcare providers.
Future R&D focus on smart phone-connected therapies could tap into the trend of personalized and accessible healthcare solutions. The efficacy and user-friendliness of such technologies will be critical for their success. It will be important to monitor clinical trial outcomes and peer-reviewed publications to assess the potential impact of these therapies on patient outcomes and healthcare costs.
Record full year 2023 net sales of $16.0 million increased
Company to host conference call and webcast today, March 13, 2024 at 4:30pm EST
ROCKAWAY, N.J., March 13, 2024 (GLOBE NEWSWIRE) -- electroCore, Inc. (Nasdaq: ECOR) (the “Company”), a commercial-stage bioelectronic medicine and wellness company, today announced fourth quarter and full year 2023 financial results.
Fourth Quarter 2023 and Recent Highlights
- Reported record full year of 2023 revenue of
$16.0 million , an increase of approximately87% over full year of 2022 - Record revenue in the fourth quarter of 2023 of
$5.2 million , an increase of approximately103% over the fourth quarter of 2022
Fourth Quarter and Full Year 2023 Financial Results
For the year ended December 31, 2023, electroCore reported net sales of
| Three months ended | Year ended | |||||||||||||||||||||||
| (in thousands) | December 31, | December 31, | ||||||||||||||||||||||
| Channel | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||||
| Rx gammaCore – VA/DoD | $ | 3,113 | $ | 1,539 | $ | 9,636 | $ | 5,099 | ||||||||||||||||
| Rx gammaCore – U.S. Commercial | 483 | 489 | ( | ) | 1,797 | 1,735 | ||||||||||||||||||
| Outside the United States | 523 | 429 | 1,821 | 1,618 | ||||||||||||||||||||
| Truvaga | 323 | 15 | * | 1,027 | 15 | * | ||||||||||||||||||
| TAC-STIM | 749 | 88 | * | 1,749 | 125 | * | ||||||||||||||||||
| $ | 5,191 | $ | 2,560 | 103% | $ | 16,030 | $ | 8,592 | 87% | |||||||||||||||
| * not applicable | ||||||||||||||||||||||||
Gross profit for the full year of 2023 was
Total operating expenses for the full year of 2023 were approximately
Research and development expense for the full year of 2023 was
Selling, general and administrative expense for the full year of 2023 was
GAAP net loss for the full year of 2023 was
Adjusted EBITDA net loss in the fourth quarter of 2023 was a loss of
The Company defines adjusted EBITDA net loss as GAAP net loss, adjusting to exclude non-operating gains/losses, depreciation and amortization, stock-compensation expense, write-off of right of use operating lease, inventory reserve charges, legal fees associated with stockholders’ litigation, and provision/benefit from income taxes. A reconciliation of GAAP net loss to Non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in this press release.
Net cash used in operating activities for the full year ended December 31, 2023 was
Cash, cash equivalents and restricted cash at December 31, 2023, totaled approximately
Webcast and Conference Call Information
electroCore’s management team will host a conference call today, March 13, 2024, beginning at 4:30 pm EST.
Investors interested in listening to the conference call or webcast may do so by dialing 877-407-8835 for domestic callers or 201-689-8779 for international callers, using conference ID: 13744117, or connecting to the Web at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=ISZCGFO3. An archived webcast of the event will be available on the “Investors” section of the Company’s website at: www.electrocore.com.
About electroCore, Inc.
electroCore, Inc. is a commercial stage bioelectronic medicine and wellness company dedicated to improving health through its non-invasive vagus nerve stimulation (“nVNS”) technology platform. Our focus is the commercialization of medical devices for the management and treatment of certain medical conditions and consumer product offerings utilizing nVNS to promote general wellbeing and human performance in the United States and select overseas markets.
For more information, visit www.electrocore.com.
Forward-Looking Statements
This press release and other written and oral statements made by representatives of electroCore may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements about, electroCore’s business prospects and clinical and product development plans; its pipeline or potential markets for its technologies; the timing, outcome and impact of regulatory, clinical and commercial developments; business prospects around its general wellness Truvaga and TAC-STIM products and other new products and markets, and other statements that are not historical in nature, particularly those that utilize terminology such as “anticipates,” “will,” “expects,” “believes,” “intends,” and other words of similar meaning, derivations of such words and the use of future dates. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the ability to raise the additional funding needed to continue to pursue electroCore’s business and product development plans, the inherent uncertainties associated with developing new products or technologies, the ability to commercialize gammaCore™, TAC-STIM™, and Truvaga™, electroCore’s results of operations and financial performance, inflation and currency fluctuations, and any expectations electroCore may have with respect thereto, competition in the industry in which electroCore operates and overall economic and market conditions. Any forward-looking statements are made as of the date of this press release, and electroCore assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents electroCore files with the SEC available at www.sec.gov.
Contact:
ECOR Investor Relations
(973) 302-9253
investors@electrocore.com
| electroCore, Inc. Consolidated Statements of Operations (in thousands, except per share data) | ||||||||||||||||
| Three months ended | Year ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net sales | $ | 5,191 | $ | 2,560 | $ | 16,030 | $ | 8,592 | ||||||||
| Cost of goods sold | 1,100 | 640 | 2,804 | 1,616 | ||||||||||||
| Gross profit | 4,091 | 1,920 | 13,226 | 6,976 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 1,108 | 1,628 | 5,321 | 5,520 | ||||||||||||
| Selling, general and administrative | 6,941 | 6,209 | 27,174 | 24,330 | ||||||||||||
| Total operating expenses | 8,049 | 7,837 | 32,495 | 29,850 | ||||||||||||
| Loss from operations | (3,958 | ) | (5,917 | ) | (19,269 | ) | (22,874 | ) | ||||||||
| Other (income) expense | ||||||||||||||||
| Interest and other income | (135 | ) | (142 | ) | (433 | ) | (287 | ) | ||||||||
| Other expense | 184 | 1 | 184 | 6 | ||||||||||||
| Total other income | 49 | (141 | ) | (249 | ) | (281 | ) | |||||||||
| Loss before income taxes | (4,007 | ) | (5,776 | ) | (19,020 | ) | (22,593 | ) | ||||||||
| (Provision) Benefit from income taxes | (25 | ) | (14 | ) | 186 | 431 | ||||||||||
| Net loss | $ | (4,032 | ) | $ | (5,790 | ) | $ | (18,834 | ) | $ | (22,162 | ) | ||||
| Net loss per share of common stock - Basic and Diluted | $ | (0.61 | ) | $ | (1.22 | ) | $ | (3.42 | ) | $ | (4.69 | ) | ||||
| Weighted average number of common shares outstanding - Basic and Diluted | 6,616 | 4,744 | 5,515 | 4,729 | ||||||||||||
| All common stock share and per share data reflects the reverse stock split effective February 15, 2023. | ||||||||||||||||
| electroCore, Inc. Consolidated Balance Sheet Information (in thousands) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| Cash and cash equivalents | $ | 10,331 | $ | 17,712 | |||
| Restricted cash | $ | 250 | $ | 250 | |||
| Total assets | $ | 16,102 | $ | 24,756 | |||
| Current liabilities | $ | 8,123 | $ | 7,045 | |||
| Total liabilities | $ | 8,660 | $ | 7,670 | |||
| Total equity | $ | 7,442 | $ | 17,086 | |||
(Unaudited) Use of Non-GAAP Financial Measure
The Company is presenting adjusted EBITDA net loss because it believes this measure is a useful indicator of its operating performance. Management uses this non-GAAP measure principally as a measure of the Company’s core operating performance and believes that this measure is useful to investors because it is frequently used by the financial community, investors, and other interested parties to evaluate companies in the Company’s industry. The Company also believes that this measure is useful to its management and investors as a measure of comparative operating performance from period to period. Additionally, the Company believes its use of non-GAAP adjusted EBITDA net loss from operations facilitates management’s internal comparisons to historical operating results by factoring out potential differences caused by gains and charges not related to its regular, ongoing business, including, without limitation, non-cash charges and certain large and unpredictable charges such as restructuring expenses.
The Company defines adjusted EBITDA net loss as GAAP net loss, adjusting to exclude non-operating gains/losses, depreciation and amortization, stock-compensation expense, write-off of right of use operating lease, inventory reserve charges, legal fees associated with stockholders’ litigation, and provision/benefit from income taxes. A reconciliation of GAAP net loss to Non-GAAP adjusted EBITDA net loss is provided in the financial statement table below.
| Three months ended | Year ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| GAAP net loss | $ | (4,032 | ) | $ | (5,790 | ) | $ | (18,834 | ) | $ | (22,162 | ) | |||
| Depreciation and amortization | 227 | 148 | 962 | 548 | |||||||||||
| Stock-based compensation | 400 | 587 | 1,698 | 2,682 | |||||||||||
| Inventory reserve charge | 424 | 217 | 682 | 217 | |||||||||||
| Severance and other related charges | 19 | - | 464 | - | |||||||||||
| Legal fees associated with stockholders’ litigation | 8 | 251 | 50 | 400 | |||||||||||
| Interest and other income / expense | 49 | (141 | ) | (249 | ) | (281 | ) | ||||||||
| Provision (benefit) from income taxes | 25 | 14 | (186 | ) | (431 | ) | |||||||||
| Adjusted EBITDA net loss | $ | (2,880 | ) | $ | (4,714 | ) | $ | (15,413 | ) | $ | (19,027 | ) | |||
The Company’s use of a non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are: (i) the non-GAAP measure does not reflect interest or tax payments that may represent a reduction in cash available; (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and the non-GAAP measure does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (iii) the non-GAAP measure does not reflect the potentially dilutive impact of equity-based compensation; and (iv) the non-GAAP measure does not reflect changes in, or cash requirements for working capital needs; other companies, including companies in electroCore’s industry, may calculate adjusted EBITDA net loss differently, effectively reducing its usefulness as a comparative measure.
Because of these and other limitations, you should consider the non-GAAP measure together with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and other GAAP results. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the preceding financial statements table of this press release.
FAQ
What were electroCore, Inc.'s (ECOR) net sales for the full year 2023?
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What was electroCore's GAAP net loss for 2023?
