KORU Medical Systems, Inc. Announces 2024 First Quarter Financial Results Delivering Double-Digit Revenue Growth
KORU Medical Systems, Inc. (NASDAQ: KRMD) reported Q1 2024 financial results with net revenues of $8.2 million, an 11% increase YoY. Gross profit increased by 23% to $5.1 million. The company reaffirmed its full year 2024 revenue guidance of $31.2-$32.2 million, reflecting growth of 10-13% YoY. KORU Medical continues to expand its Core business and Novel Therapies collaborations, aiming for increased value for customers, patients, and shareholders.
First quarter 2024 net revenues of $8.2 million, an 11% increase YoY and record high quarterly revenues.
Core business (U.S. and International) experienced 14% growth YoY, driven by SCIg market growth, share gains, and geographic expansion.
Entered a Novel Therapies collaboration with an oncology drug therapy, bringing total collaborations to 16.
Gross profit increased by 23% to $5.1 million, with a gross margin of 62% showing improvement YoY.
Ending cash balance of $10.8 million and quarterly cash usage of $0.7 million, reflecting increased operating leverage and working capital improvements.
Reaffirmed full year 2024 revenue guidance of $31.2-$32.2 million, representing growth of 10-13% YoY.
Novel Therapies net revenues declined by 21.3% primarily due to a milestone completion for a collaboration agreement in the prior year period.
Net loss for Q1 2024 was $1.9 million, compared to a net loss of $2.4 million for the same period in 2023.
Adjusted EBITDA for Q1 2024 was ($0.9) million, compared to adjusted EBITDA of ($2.0) million for the same period in 2023.
Cash flow breakeven expected in Q4 2024 and cash flow positive for full year 2025.
Insights
Observing KORU Medical Systems' recent performance, the 11% year-over-year increase in net revenues to
Impressively, the gross profit margin expansion to 62% from 56.1% reflects significant operational efficiencies. This improvement could be a result of the company's strategic consolidation of manufacturing sites and indicates robust cost management that if sustained, can enhance profitability. Potential investors should watch for consistency in this trend as it could be a strong driver of future earnings.
The guidance reaffirmation suggests a stable outlook, but investors should remain cognizant that the projected net revenue growth rates of 10% to 13% may already be priced into the stock. The anticipated cash flow breakeven in Q4 2024 and positive cash flow in 2025 can also be seen as a pivotal target for assessing the company's fiscal discipline and long-term viability.
The growth in the subcutaneous immunoglobulin (SCIg) market and the prefill adoption rates are significant for KORU Medical's core business, as these factors suggest a larger addressable market and potential for increased market share. The novel therapies collaboration in oncology also indicates strategic diversification which could reduce dependency on core SCIg products and open up new revenue streams.
Moreover, the collaboration count at 16, with 3 signed in the current year, reflects an active pipeline that may catalyze future growth. For investors, the key to evaluating KORU's long-term potential lies in monitoring the success rate of these collaborations converting into tangible products and revenue contributions.
From a market perspective, KORU's focus on patient-centric infusion solutions positions the company in a high-demand area of medical technology, which is expected to grow due to aging populations and increased prevalence of chronic diseases. The narrative of expanding geographical footprint also aligns with broader trends in healthcare globalisation, tapping into emerging markets' potential.
Nonetheless, the decrease in Novel Therapies revenues by 21.3% warrants a closer look, as it may indicate challenges in sustaining growth in this segment or could merely reflect the milestone-based nature of such revenues. Investors should follow subsequent quarters to discern whether this is a temporary setback or indicative of a trend.
Recent Highlights
-
First quarter 2024 net revenues of
$8.2 million 11% increase over the prior year and record high quarterly revenues -
Core business (
U.S. and International) growth of14% over the prior year, driven by overall SCIg market growth, share gains, and geographic expansion - Entered a Novel Therapies collaboration with an oncology drug therapy, bringing total collaborations to 16, with 3 signed year-to-date
-
Gross profit of
$5.1 million 23% increase over the prior year, and gross margin of62% , reflecting year-over-year improvement of 620 basis points -
Ending cash balance of
$10.8 million $0.7 million -
Reaffirmed full year 2024 revenue guidance of
$31.2 million $32.2 million 10% to13% over the prior year.
“We are excited by a strong start to the year, with double-digit record revenue growth in our Core business and the addition of a new oncology collaboration in our Novel Therapies business,” said Linda Tharby, KORU Medical’s President and CEO. “The Core business saw another quarter of sequential growth in the subcutaneous immunoglobulin market, increasing prefill adoption rates, and further geographic expansion. As a part of our Novel Therapies strategy to expand the Freedom subcutaneous infusion system to new drug therapies, we are proud of the progress we’ve made in diversifying our drug pipeline and signing three new collaborations year-to-date. We also continued to drive operating leverage evidenced this quarter by gross margin expansion and a significant reduction in cash usage over the prior year. We are committed to our strategic growth agenda and providing increased value to our customers, patients, and shareholders.”
2024 First Quarter Financial Results
|
|
Three Months Ended March 31, |
|
Change from Prior Year |
|
% of Net Revenues |
|
|||||||||||||
|
|
2024 |
|
2023 |
|
$ |
% |
|
2024 |
|
2023 |
|
||||||||
Net Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Domestic Core |
|
$ |
5,953,865 |
|
$ |
5,719,135 |
|
$ |
234,730 |
|
4.1 |
% |
|
72.7 |
% |
|
77.4 |
% |
|
|
International Core |
|
|
1,790,483 |
|
|
1,097,490 |
|
|
692,993 |
|
63.1 |
% |
|
21.8 |
% |
|
14.8 |
% |
|
|
Total Core |
|
|
7,744,348 |
|
|
6,816,625 |
|
|
927,723 |
|
13.6 |
% |
|
94.5 |
% |
|
92.2 |
% |
|
|
Novel Therapies |
|
|
453,450 |
|
|
575,980 |
|
|
(122,530 |
) |
(21.3 |
%) |
5.5 |
% |
|
7.8 |
% |
|
||
Total |
|
$ |
8,197,798 |
|
$ |
7,392,605 |
|
$ |
805,193 |
|
10.9 |
% |
|
100 |
% |
|
100 |
% |
|
|
Total net revenues increased
Gross profit increased
Total operating expenses for the first quarter of 2024 were
Net loss for the first quarter of 2024 was
Cash and cash equivalents were
2024 Guidance
Reaffirming full year 2024 net revenue between
-
Gross margin between
59% and61% for the full year 2024 -
2024 year-end cash balance greater than
$8.0 million - Cash flow breakeven in the fourth quarter of 2024 and cash flow positive for full year 2025
Conference Call and Webcast Details
The Company will host a live conference call and webcast to discuss these results and provide a corporate update on Wednesday, May 1, 2024 at 4:30 PM ET.
To participate in the call, please dial (877) 407-0784 (domestic) or (201) 689-8560 (international). The live webcast will be available on the IR Calendar on the News/Events page of the Investors section of KORU Medical's website.
Non-GAAP Measures
This press release includes the non-GAAP financial measures “adjusted EPS”, "adjusted diluted EPS" and “adjusted EBITDA” that are not in accordance with, nor an alternate to, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on KORU Medical's reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company's financial results. Non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results. Reconciliations of the Company's non-GAAP measures are included at the end of this press release.
About KORU Medical Systems
KORU Medical develops, manufactures, and commercializes innovative and patient-centric large volume subcutaneous infusion solutions that improve quality of life for patients around the world. The FREEDOM Syringe Infusion System (“the FREEDOM System”) currently includes the FREEDOM60® and FreedomEdge® Syringe Infusion Drivers, Precision Flow Rate Tubing™ and HIgH-Flo Subcutaneous Safety Needle Sets™. These devices are used for infusions administered in the home and alternate care settings. For more information, please visit www.korumedical.com.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. All statements that are not historical fact are forward-looking statements, including, but not limited to, financial guidance and expected operating performance for fiscal 2024. Forward-looking statements discuss the Company's current expectations and projections relating to its financial position, results of operations, plans, objectives, future performance, and business. Forward-looking statements can be identified by words such as "guidance", "expect", "plan", "believe" and "will". Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, uncertainties associated with SCIg market growth, prefilled syringe penetration, plasma supply, clinical trial activity and success, the Company’s EU certification, the shift to increased healthcare delivery in the home, new patient diagnoses, customer ordering patterns, global health crises, innovation and competition, labor and supply price increases, inflationary impacts, labor supply, and those risks and uncertainties included under the captions "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 , which is on file with the SEC and available on our website at www.korumedical.com/investors and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of May 1, 2024. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.
KORU MEDICAL SYSTEMS, INC. BALANCE SHEETS (UNAUDITED) |
||||||||
|
|
|
|
|||||
|
|
March 31, |
December 31, |
|||||
|
|
2024 |
2023 |
|||||
|
|
|
|
|
|
|||
ASSETS |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
CURRENT ASSETS |
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
10,820,317 |
|
$ |
11,482,240 |
|
|
Accounts receivable less allowance for doubtful accounts of |
|
|
4,392,511 |
|
|
4,045,211 |
|
|
Inventory |
|
|
3,147,312 |
|
|
3,481,301 |
|
|
Other receivables |
|
|
288,714 |
|
|
28,889 |
|
|
Prepaid expenses |
|
|
830,408 |
|
|
1,218,288 |
|
|
TOTAL CURRENT ASSETS |
|
|
19,479,262 |
|
|
20,255,929 |
|
|
Property and equipment, net |
|
|
3,755,530 |
|
|
3,837,657 |
|
|
Intangible assets, net of accumulated amortization of |
|
|
737,901 |
|
|
754,361 |
|
|
Operating lease right-of-use assets |
|
|
3,428,885 |
|
|
3,514,055 |
|
|
Deferred income tax assets, net of allowance for non-realization of deferred tax assets of |
|
|
— |
|
|
— |
|
|
Other assets |
|
|
98,970 |
|
|
98,970 |
|
|
TOTAL ASSETS |
|
$ |
27,500,548 |
|
$ |
28,460,972 |
|
|
|
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
CURRENT LIABILITIES |
|
|
|
|
|
|||
Accounts payable |
|
$ |
1,774,185 |
|
$ |
975,193 |
|
|
Accrued expenses |
|
|
1,459,405 |
|
|
1,711,427 |
|
|
Note payable |
|
|
159,031 |
|
|
314,344 |
|
|
Other liabilities |
|
|
457,653 |
|
|
512,520 |
|
|
Accrued payroll and related taxes |
|
|
519,441 |
|
|
462,941 |
|
|
Financing lease liability – current |
|
|
111,103 |
|
|
109,540 |
|
|
Operating lease liability – current |
|
|
372,109 |
|
|
368,313 |
|
|
TOTAL CURRENT LIABILITIES |
|
|
4,852,927 |
|
|
4,454,278 |
|
|
Financing lease liability, net of current portion |
|
|
288,253 |
|
|
316,623 |
|
|
Operating lease liability, net of current portion |
|
|
3,241,837 |
|
|
3,336,300 |
|
|
TOTAL LIABILITIES |
|
|
8,383,017 |
|
|
8,107,201 |
|
|
|
|
|
|
|
|
|||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|||
Common stock, |
|
|
491,436 |
|
|
490,899 |
|
|
Additional paid-in capital |
|
|
47,717,888 |
|
|
47,018,707 |
|
|
Treasury stock, 3,420,502 shares as of March 31, 2024 and December 31, 2023, at cost |
|
|
(3,843,562 |
) |
|
(3,843,562 |
) |
|
Accumulated deficit |
|
|
(25,248,231 |
) |
|
(23,312,273 |
) |
|
TOTAL STOCKHOLDERS’ EQUITY |
|
|
19,117,531 |
|
|
20,353,771 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
27,500,548 |
|
$ |
28,460,972 |
|
|
The accompanying notes are an integral part of these financial statements. |
||||||||
KORU MEDICAL SYSTEMS, INC. STATEMENTS OF OPERATIONS (UNAUDITED) |
||||||||
|
|
|
||||||
|
Three Months Ended |
|||||||
|
March 31, |
|||||||
2024 |
2023 |
|||||||
|
|
|
||||||
NET REVENUES |
$ |
8,197,798 |
|
$ |
7,392,605 |
|
||
Cost of goods sold |
|
3,094,500 |
|
|
3,245,570 |
|
||
Gross Profit |
|
5,103,298 |
|
|
4,147,035 |
|
||
|
|
|
||||||
OPERATING EXPENSES |
|
|
||||||
Selling, general and administrative |
|
5,357,620 |
|
|
5,425,877 |
|
||
Research and development |
|
1,475,674 |
|
|
1,564,869 |
|
||
Depreciation and amortization |
|
231,370 |
|
|
213,117 |
|
||
Total Operating Expenses |
|
7,064,664 |
|
|
7,203,863 |
|
||
|
|
|
||||||
Net Operating Loss |
|
(1,961,366 |
) |
|
(3,056,828 |
) |
||
|
|
|
||||||
Non-Operating Income/(Expense) |
|
|
||||||
Loss on currency exchange |
|
(11,479 |
) |
|
(680 |
) |
||
Loss on disposal of fixed assets, net |
|
(300 |
) |
|
(56,279 |
) |
||
Interest income, net |
|
37,187 |
|
|
125,502 |
|
||
TOTAL OTHER INCOME |
|
25,408 |
|
|
68,543 |
|
||
|
|
|
||||||
LOSS BEFORE INCOME TAXES |
|
(1,935,958 |
) |
|
(2,988,285 |
) |
||
|
|
|
||||||
Income Tax Benefit |
|
— |
|
|
577,400 |
|
||
|
|
|
||||||
NET LOSS |
$ |
(1,935,958 |
) |
$ |
(2,410,885 |
) |
||
|
|
|
||||||
NET LOSS PER SHARE |
|
|
||||||
|
|
|
||||||
Basic |
$ |
(0.04 |
) |
$ |
(0.05 |
) |
||
Diluted |
$ |
(0.04 |
) |
$ |
(0.05 |
) |
||
|
|
|
||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
|
|
||||||
|
|
|
||||||
Basic |
|
45,712,224 |
|
|
45,487,593 |
|
||
Diluted |
|
45,712,224 |
|
|
45,487,593 |
|
||
The accompanying notes are an integral part of these financial statements. |
||||||||
KORU MEDICAL SYSTEMS, INC. STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||
|
|
|
|
|
||||
|
|
For the
|
||||||
|
|
March 31, |
||||||
|
|
2024 |
2023 |
|||||
|
|
|
|
|
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|||
Net Loss |
|
$ |
(1,935,958 |
) |
$ |
(2,410,885 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|||
Stock-based compensation expense and warrant expense |
|
|
699,718 |
|
|
881,222 |
|
|
Depreciation and amortization |
|
|
231,370 |
|
|
213,117 |
|
|
Deferred income taxes |
|
|
— |
|
|
(577,400 |
) |
|
Loss on disposal of fixed assets |
|
|
300 |
|
|
56,279 |
|
|
ROU landlord credit |
|
|
(5,497 |
) |
|
(5,497 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|||
Increase in Accounts receivable |
|
|
(607,125 |
) |
|
(647,994 |
) |
|
Decrease / (Increase) in Inventory |
|
|
333,989 |
|
|
(233,551 |
) |
|
Decrease in Prepaid expenses and other assets |
|
|
387,880 |
|
|
288,786 |
|
|
(Decrease) / Increase in Other liabilities |
|
|
(54,867 |
) |
|
4,207 |
|
|
Increase / (Decrease) in Accounts payable |
|
|
798,992 |
|
|
(888,679 |
) |
|
Increase / (Decrease) in Accrued payroll and related taxes |
|
|
56,500 |
|
|
(41,984 |
) |
|
Decrease in Accrued expenses |
|
|
(252,022 |
) |
|
(1,298,204 |
) |
|
NET CASH USED IN OPERATING ACTIVITIES |
|
|
(346,720 |
) |
|
(4,660,583 |
) |
|
|
|
|
|
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|||
Purchases of property and equipment |
|
|
(133,083 |
) |
|
(272,605 |
) |
|
Purchases of intangible assets |
|
|
(0 |
) |
|
(11,232 |
) |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
|
(133,083 |
) |
|
(283,837 |
) |
|
|
|
|
|
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|||
Payments on indebtedness |
|
|
(155,313 |
) |
|
(214,892 |
) |
|
Payments on finance lease liability |
|
|
(26,807 |
) |
|
(24,080 |
) |
|
NET CASH (USED IN) FINANCING ACTIVITIES |
|
|
(182,120 |
) |
|
(238,972 |
) |
|
|
|
|
|
|
|
|||
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
(661,923 |
) |
|
(5,183,392 |
) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
11,482,240 |
|
|
17,408,257 |
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
10,820,317 |
|
$ |
12,224,865 |
|
|
|
|
|
|
|
|
|||
Supplemental Information |
|
|
|
|
|
|||
Cash paid during the periods for: |
|
|
|
|
|
|||
Interest |
|
$ |
12,296 |
|
$ |
12,326 |
|
|
Income taxes |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|||
Schedule of Non-Cash Operating, Investing and Financing Activities: |
|
|
|
|
|
|||
Issuance of common stock as compensation |
|
$ |
123,804 |
|
$ |
175,776 |
|
|
The accompanying notes are an integral part of these financial statements. |
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KORU MEDICAL SYSTEMS, INC. SUPPLEMENTAL INFORMATION (UNAUDITED) |
|||||||
A reconciliation of our non-GAAP measures is below: |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
Reconciliation of GAAP Net Loss |
March 31, |
||||||
to Non-GAAP Adjusted EBITDA: |
2024 |
2023 |
|||||
GAAP Net Loss |
$ |
(1,935,958 |
) |
$ |
(2,410,885 |
) |
|
Tax (Benefit)/Expense |
|
(388,675 |
) |
|
(577,400 |
) |
|
Valuation Allowance for DTA |
|
388,675 |
|
|
— |
|
|
Depreciation and Amortization |
|
231,369 |
|
|
213,117 |
|
|
Interest (Income), Net |
|
(37,187 |
) |
|
(125,502 |
) |
|
Reorganization Charges |
|
99,329 |
|
|
— |
|
|
Manufacturing Initiative Expenses |
|
— |
|
|
49,053 |
|
|
Product Discontinuance |
|
— |
|
|
— |
|
|
Stock-based Compensation Expense |
|
699,718 |
|
|
881,222 |
|
|
Adjusted EBITDA |
$ |
(942,729 |
) |
$ |
(1,970,395 |
) |
|
Weighted average number common shares |
45,712,224 |
|
45,487,593 |
|
|||
|
Three Months Ended |
||||||
Reconciliation of Reported Diluted EPS |
March 31, |
||||||
to Non-GAAP Adjusted Diluted EPS: |
2024 |
2023 |
|||||
Reported Diluted Earnings Per Share |
$ |
(0.04 |
) |
$ |
(0.05 |
) |
|
Tax (Benefit)/Expense |
|
(0.01 |
) |
|
(0.01 |
) |
|
Valuation Allowance for DTA |
|
0.01 |
|
|
— |
|
|
Depreciation and Amortization |
|
0.01 |
|
|
0.01 |
|
|
Interest (Income)/Expense, Net |
|
— |
|
|
— |
|
|
Reorganization Charges |
|
— |
|
|
— |
|
|
Manufacturing Initiative Expenses |
|
— |
|
|
— |
|
|
Product Discontinuance |
|
— |
|
|
— |
|
|
Stock-based Compensation Expense |
|
0.02 |
|
|
0.02 |
|
|
Adjusted Diluted Earnings Per Share |
$ |
(0.02 |
) |
$ |
(0.04 |
) |
|
*Numbers presented are rounded to the nearest whole cent and percentage
Reorganization Charges. We have excluded the effect of reorganization charges in calculating our non-GAAP measures. In 2023 and 2024 we incurred severance expenses related to the reorganization of the leadership team, which we would not have otherwise incurred in periods presented as part of continuing operations.
Manufacturing Initiative Expenses. We have excluded the effect of expenses related to creating manufacturing efficiencies in calculating our non-GAAP measures. We incurred expenses in connection with these initiatives which we would not have otherwise incurred in periods presented as part of our continuing operations.
Stock-based Compensation Expense. We have excluded the effect of stock-based compensation expense in calculating our non-GAAP measures. We record non-cash compensation expenses related to grants of options and restricted shares for executives, employees and consultants, and grants of shares to our board of directors. Depending upon the size, timing and the terms of the grants, the non-cash compensation expense may vary significantly but will recur in future periods.
Allowance for nonrealization of deferred tax assets (DTA). We have excluded the effect of recording a full valuation allowance on our deferred tax assets in the first quarter ended 2024 in the amount of
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501464191/en/
Investor Contact:
Louisa Smith
investor@korumedical.com
Source: KORU Medical Systems, Inc.
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