Myomo Third Quarter 2021 Financial Results Feature Record Revenue

Rhea-AI Summary

Myomo (NYSE American: MYO) reported record financial results for Q3 2021, achieving $4.4 million in revenue, a 128% increase year-over-year, and 159% year-to-date. Gross margin improved to 75%, up 1,900 basis points. The backlog rose to a record 177 units. However, the company faces challenges including temporary labor shortages impacting deliveries. The net loss for Q3 was $2.1 million, or $0.36 per share. Despite strong revenue growth, forecasting for Q4 is difficult due to these constraints.

Positive

• Q3 revenue reached $4.4 million, up 128% year-over-year.
• Gross margin increased to 75%, a 1900 basis point improvement.
• Record backlog of 177 units, indicating strong demand.

Negative

• Net loss was $2.1 million for Q3, compared to $2.8 million in the prior year.
• Labor shortages hindered capacity and deliveries, impacting Q4 revenue forecasts.

Revenue of $4.4 million up 128% over prior year, up 159% year-to-date

Gross margin of 75% up 1,900 basis points over prior year

Backlog increased to 177 units

Conference call begins at 4:30 p.m. Eastern time today

BOSTON--(BUSINESS WIRE)-- Myomo, Inc. (NYSE American: MYO) (“Myomo” or the “Company”), a wearable medical robotics company that offers increased functionality for those suffering from neurological disorders and upper-limb paralysis, today announced financial results for the three and nine months ended September 30, 2021.

Financial and operational highlights for the third quarter of 2021 include the following (all comparisons are with the third quarter of 2020, unless otherwise noted):

• Revenue was $4.4 million, up 128% and representing the highest quarterly revenue in the Company’s history
• Revenue from the direct billing channel was a record 85% of total revenue, up from 74% in the second quarter of 2021
• Revenue units were 102, up 100% including 37 units where orders and insurance authorizations were received during the quarter
• Gross margin was 75%, up 1,900 basis points
• Backlog, which represents insurance authorizations and orders received but not yet converted to revenue, was a record 177 units as of September 30, 2021, up 11% from June 30, 2021
• Orders and insurance authorizations were for 133 patients to receive a MyoPro^®
• The reimbursement pipeline as of September 30, 2021 consisted of 920 MyoPro candidates, including 331 additions to the pipeline during the third quarter

Management Commentary

“We are proud to be reporting both the highest quarterly revenue and the highest direct billing channel revenue in the Company’s history. These achievements demonstrate the continued success of our transition to being a direct provider of the MyoPro to our patients,” stated Paul R. Gudonis, Myomo’s chairman and chief executive officer. “Our focus is on growing the pipeline and backlog to position the Company for a strong start to 2022, while remaining ever mindful of our mission to improve the lives of people with upper-limb paralysis.”

Financial Results

		For the Three Months Ended September 30,				Period-to-Period Change				For the Nine Months Ended September 30,				Period-to-Period Change
		2021		2020		$		%		2021		2020		$		%
Revenue		$ 4,383,957		$ 1,926,660		$ 2,457,297		128%		$ 9,824,740		$ 3,793,395		$ 6,031,345		159%
Cost of revenue		1,110,204		855,338		254,866		30%		2,634,922		1,592,851		1,042,071		65%
Gross profit		$ 3,273,753		$ 1,071,322		$ 2,202,431		206%		$ 7,189,818		$ 2,200,544		$ 4,989,274		227%
Gross margin		75%		56%				19%		73%		58%				16%

Revenue for the third quarter of 2021 was $4.4 million, an increase of 128% compared with the third quarter of 2020. Growth was driven by an increase in the number of revenue units and a higher average selling price. Myomo recognized revenue on 102 units in the third quarter of 2021, an increase of 100% compared with the third quarter of 2020. Year-to-date revenue of $9.8 million was up 159% compared with the same period a year ago.

Gross margin for the third quarter of 2021 was 75%, compared with 56% for the third quarter of 2020. Margin expansion primarily reflects a higher average selling price and improved fixed cost coverage resulting from higher unit volume. The Company delivered 108 units to patients in the third quarter. Year-to-date gross margin was 73%, compared with 58% in the year-ago period.

Operating expenses for the third quarter of 2021 were $5.3 million, an increase of 47% compared with the third quarter of 2020. This increase was driven by higher clinical and reimbursement headcount and higher advertising costs to generate more leads and additions to the pipeline. Operating expenses for the first nine months of 2021 were $14.8 million, an increase of 34% compared with the same period a year ago.

Operating loss for the third quarter of 2021 decreased to $2.0 million from $2.5 million for the third quarter of 2020. Net loss for the third quarter of 2021 was $2.1 million, or $0.36 per share, compared with a net loss of $2.8 million, or $0.70 per share, for the third quarter of 2020. Net loss available to common stockholders for the first nine months of 2021 was $7.6 million, or $1.38 per share, compared with $10.5 million, or $3.63 per share, for the comparable period in 2020. Net loss available to common stockholders for the first nine months of 2020 included a deemed dividend of $0.7 million related to the repricing of certain warrants.

Adjusted EBITDA¹ for the third quarter of 2021 was negative $1.7 million, compared with negative $2.3 million for the third quarter of 2020. Adjusted EBITDA for the first nine months of 2021 was negative $6.7 million, compared with negative $8.3 million for the same period a year ago. A reconciliation of GAAP net loss to this non-GAAP financial measure appears below.

Liquidity

Cash and cash equivalents as of September 30, 2021 were $12.6 million. Cash used in operating activities was $2.2 million in the third quarter of 2021. The Company continues to believe its existing cash is sufficient to fund operations for at least the next 12 months.

Business Outlook

“While we expect to report strong year-over-year revenue growth for 2021, we face some short-term challenges in the fourth quarter. Although there are a record number of units in backlog, a temporary labor shortage at one of our subcontractors constrained capacity and deliveries in the early part of the quarter,” said Mr. Gudonis. “Capacity at that subcontractor has returned to nearly normal, but it will be difficult to make up all the delayed shipments by the end of the year. Therefore, those deliveries and associated revenue may be realized in early 2022. In addition, we are appealing a number of recent claim denials after receipt of a pre-authorization and delivery to the patient. As a result of these factors, it is difficult to forecast revenue for the fourth quarter.”

Conference Call and Webcast Information

Myomo will hold a conference call today at 4:30 p.m. Eastern time to discuss these results and answer questions. Participants are encouraged to pre-register for the call here. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the start of the call. Those without internet access or unable to pre-register may participate by dialing 844-707-6932 (U.S.) or 412-317-9250 (International). A webcast of the call will also be available at Myomo’s Investor Relations page at http://ir.myomo.com/.

A replay of the webcast will be available beginning approximately one hour after the completion of the live conference call at http://ir.myomo.com/. A dial-in replay of the call will be available until November 24, 2021; please dial 877-344-7529 (U.S.) or 412-317-0088 (International) and provide the passcode 1016253.

Non-GAAP Financial Measures

Myomo is providing financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA. This non-GAAP financial measure is not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Myomo believes the use of this non-GAAP financial measure provides supplementary information for investors to use in evaluating operating performance and in comparing Myomo’s financial measures with other companies in its industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss of extinguishment of debt. This non-GAAP financial measure is not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with GAAP financial measures. Investors are encouraged to review the reconciliation of this non-GAAP measure to its most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.

About Myomo

Myomo, Inc. is a wearable medical robotics company that offers improved arm and hand function for those suffering from neurological disorders and upper-limb paralysis. Myomo develops and markets the MyoPro product line. MyoPro is a powered upper-limb orthosis designed to support the arm and restore function to the weakened or paralyzed arms of certain patients suffering from CVA stroke, brachial plexus injury, traumatic brain or spinal cord injury, ALS or other neuromuscular disease or injury. It is currently the only marketed device that, sensing a patient’s own EMG signals through non-invasive sensors on the arm, can restore an individual’s ability to perform activities of daily living, including feeding themselves, carrying objects and doing household tasks. Many are able to return to work, live independently and reduce their cost of care. Myomo is headquartered in Boston, Massachusetts, with sales and clinical professionals across the U.S. and representatives internationally. For more information, please visit www.myomo.com.

Forward-Looking Statements

This press release contains forward-looking statements regarding the Company’s future business expectations, including expectations for revenues in the first quarter, its current authorization backlog and its cash runway and capital requirements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors.

These factors include, among other things:

• the direct and indirect impact of the novel coronavirus (COVID-19) on our business and operations, including fabrication and delivery, sales, patient consultations, supply chain, manufacturing, insurance reimbursements and employees;
• our ability to continue normal operations and patient interactions in order to cast, deliver and fit our custom-fabricated device;
• our marketing and commercialization efforts;
• our ability to achieve reimbursement from third-party payers for our products;
• our dependence upon external sources for the financing of our operations, to the extent that we do not achieve or maintain cash flow breakeven;
• our ability to effectively execute our business plan and scale up our operations;
• our expectations as to our product development programs, and;
• general market, economic, environmental and social factors that may affect the evaluation, fitting, delivery and sale of our products to patients.

More information about these and other factors that potentially could affect our financial results is included in Myomo’s filings with the Securities and Exchange Commission, including those contained in the risk factors section of the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Although the forward-looking statements in this release of financial information are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

(Tables to follow)

MYOMO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2021		2020		2021		2020
Revenue		$ 4,383,957		$ 1,926,660		$ 9,824,740		$ 3,793,395
Cost of revenue		1,110,204		855,338		2,634,922		1,592,851
Gross profit		3,273,753		1,071,322		7,189,818		2,200,544
Operating expenses:
Research and development		641,228		345,666		1,769,739		1,250,430
Selling, general and administrative		4,662,796		3,270,757		12,982,413		9,766,189
		5,304,024		3,616,423		14,752,152		11,016,619
Loss from operations		(2,030,271)		(2,545,101)		(7,562,334)		(8,816,075)
Other expense (income)
Change in fair value of derivative liabilities		—		(888)		—		(122,706)
Interest (income) expense and other expense, net		4,055		29,915		10,193		254,039
Non-cash interest expense, debt discount		—		12,135		—		218,803
Loss on extinguishment of debt		—		189,155		—		696,436
		4,055		230,317		10,193		1,046,572
Loss before income taxes		(2,034,326)		(2,775,418)		(7,572,527)		(9,862,647)
Income tax expense		22,696		1,153		66,604		2,851
Net loss		$ (2,057,022)		$ (2,776,571)		$ (7,639,131)		$ (9,865,498)
Deemed dividend on repricing of warrants (2019 revised)		—		—		—		(670,632)
Net loss attributable to common stockholders		$ (2,057,022)		$ (2,776,571)		$ (7,639,131)		$ (10,536,130)
Weighted average number of common shares outstanding:
Basic and diluted		5,681,121		3,940,113		5,530,259		2,901,398
Net loss per share attributable to common stockholders
Basic and diluted		$ (0.36)		$ (0.70)		$ (1.38)		$ (3.63)

MYOMO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
		September 30,		December 31,
		2021		2020
ASSETS
Current Assets:
Cash and cash equivalents		$ 12,606,758		$ 12,241,261
Accounts receivable, net		2,215,696		924,916
Inventories, net		644,138		707,114
Prepaid expenses and other current assets		994,137		572,684
Total Current Assets		16,460,729		14,445,975
Equipment, net		302,110		95,023
Operating lease assets with right of use		696,345		168,784
Total Assets		$ 17,459,184		$ 14,709,782
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses		3,420,654		2,848,904
Current operating lease liability		301,878		18,289
Deferred revenue		—		2,512
Total Current Liabilities		3,722,532		2,869,705
Deferred revenue		1,495		1,495
Non-current operating lease liability		474,188		155,148
Other long-term liabilities		113,423		118,060
Total Liabilities		4,311,638		3,144,408
Commitments and Contingencies
Stockholders’ Equity:
Preferred stock		—		—
Common stock		584		457
Additional paid-in capital		88,492,959		79,273,964
Accumulated other comprehensive loss		(10,509)		(12,690)
Accumulated deficit		(75,329,024)		(67,689,893)
Treasury stock, at cost		(6,464)		(6,464)
Total Stockholders’ Equity		13,147,546		11,565,374
Total Liabilities and Stockholders’ Equity		$ 17,459,184		$ 14,709,782

MYOMO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30,		2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$ (7,639,131)		$ (9,865,498)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		95,238		79,729
Stock-based compensation		831,046		411,192
Bad debt expense		—		29,839
Non-cash interest expense, debt discount		—		218,803
Amortization of original issue discount and debt restructuring fee		—		161,869
Amortization of right-of-use assets		126,529		—
Loss on extinguishment of debt		—		696,436
Change in fair value of derivative liabilities		—		(122,706)
Loss on disposal of asset		202		177
Other non-cash charges		463		(2,326)
Changes in operating assets and liabilities:
Accounts receivable		(1,281,989)		85,925
Inventories		52,734		(324,234)
Prepaid expenses and other current assets		(422,881)		30,020
Other assets		—		57,987
Accounts payable and accrued expenses		577,238		494,311
Operating lease liabilities		(51,462)		—
Deferred revenue		(2,512)		3,771
Other liabilities		(4,637)		165,889
Net cash used in operating activities		(7,719,162)		(7,878,816)
CASH USED IN INVESTING ACTIVITIES		(302,527)		(30,294)
CASH PROVIDED BY FINANCING ACTIVITIES		8,388,076		16,761,653
Effect of foreign exchange rate changes on cash		(890)		(417)
Net increase in cash, cash equivalents and restricted cash		365,497		8,852,126
Cash, cash equivalents and restricted cash, beginning of period		12,241,261		4,540,455
Cash, cash equivalents and restricted cash, end of period		$ 12,606,758		$ 13,392,581

MYOMO, INC.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(unaudited)
		For the Three Months Ended September 30,			For the Nine Months Ended September 30,
		2021		2020	2021		2020
GAAP net loss		$ (2,057,022)		$ (2,776,571)	$ (7,639,131)		$ (9,865,498)
Adjustments to reconcile to Adjusted EBITDA:
Interest (income) expense and other expense, net		4,055		29,915	10,193		254,039
Non-cash interest expense, debt discount		—		12,135	—		218,803
Loss on extinguishment of debt		—		189,155	—		696,436
Depreciation expense		36,910		26,707	95,238		79,729
Stock-based compensation		301,763		181,702	831,046		411,192
Change in fair value of derivative liabilities		—		(888)	—		(122,706)
Income tax expense		22,696		1,153	66,604		2,851
Adjusted EBITDA		$ (1,691,598)		$ (2,336,692)	$ (6,636,050)		$ (8,325,154)

 

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¹ Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss on extinguishment of debt.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211110006192/en/

For Myomo:

ir@myomo.com

Investor Relations:

Kim Sutton Golodetz

LHA Investor Relations

kgolodetz@lhai.com

212-838-3777

Source: Myomo, Inc.

FAQ

What were Myomo's revenue results for Q3 2021?

Myomo reported revenues of $4.4 million for Q3 2021, a 128% increase over the previous year.

How did Myomo's gross margin change in Q3 2021?

Myomo's gross margin improved to 75% in Q3 2021, compared to 56% in the same quarter of 2020.

What is the backlog for Myomo as of September 30, 2021?

As of September 30, 2021, Myomo's backlog reached a record 177 units.

What challenges is Myomo facing in Q4 2021?

Myomo is facing temporary labor shortages that have constrained capacity and deliveries, making Q4 revenue forecasting difficult.

What was Myomo's net loss in Q3 2021?

Myomo reported a net loss of $2.1 million, or $0.36 per share, in Q3 2021.