Silk Road Medical Reports Third Quarter 2020 Financial Results

Rhea-AI Summary

Silk Road Medical (SILK) reported Q3 2020 revenues of $20.1 million, an 18% increase from the prior year, driven by a commitment to stroke risk reduction. Gross profit rose to $14.6 million, although gross margin decreased to 73% from 76% due to COVID-19 impacts and production variances. Operating expenses increased by 18% to $23.9 million, leading to a net loss of $10.3 million or $0.31 per share, compared to a loss of $8.0 million or $0.26 per share year-over-year. The company is cautious about providing 2020 guidance due to pandemic uncertainty.

Positive

• Revenue increased 18% year-over-year to $20.1 million.
• Achieved 25,000 cumulative procedures, reflecting strong operational performance.
• Cash and equivalents were strong at $153.9 million as of September 30, 2020.

Negative

• Gross margin declined to 73% from 76% the previous year.
• Operating expenses rose by 18%, impacting overall profitability.
• Net loss widened to $10.3 million from $8.0 million year-over-year.

SUNNYVALE, Calif., Nov. 10, 2020 (GLOBE NEWSWIRE) -- Silk Road Medical, Inc. (Nasdaq: SILK), a company focused on reducing the risk of stroke and its devastating impact, today reported financial results for the three months ended September 30, 2020.

“We had a strong third quarter in which our revenues grew 18% year over year. Our patient first culture and unwavering commitment to reduce stroke risk are evidenced by our recent milestone of 25,000 cumulative procedures,” said Erica Rogers, President and Chief Executive Officer of Silk Road Medical. “We are continuing to make meaningful investments in our team and our strategic priorities, paving the way for the bright future ahead of us.”

Third Quarter 2020 Financial Results
Revenue for the third quarter of 2020 was $20.1 million, an increase of $3.0 million or 18%, compared to the third quarter of 2019.

Gross profit for the third quarter of 2020 was $14.6 million compared to $12.9 million for the third quarter of 2019. Gross margin for the third quarter of 2020 declined to 73% compared to 76% in the third quarter of 2019, driven by unfavorable production variances as a result of temporarily idled manufacturing operations early in the quarter related to COVID-19 and previously announced investments in manufacturing engineering and infrastructure projects.

Operating expenses were $23.9 million for the third quarter of 2020, compared to $20.3 million in the corresponding prior year period, which represents an increase of 18%. The increase was driven by selling, general and administrative expenses related to growth in personnel and product development initiatives and partially offset by the continued reduction in travel, tradeshow and other expenses due to COVID-19.

Net loss was $10.3 million in the third quarter of 2020, or a loss of $0.31 per share, as compared to a loss of $8.0 million, or $0.26 per share, in the corresponding period of the prior year.

On October 29, 2020, the Company refinanced its long-term debt at a lower cost of capital with a $50.0 million loan facility.

Cash, cash equivalents, and short-term investments were $153.9 million as of September 30, 2020.

2020 Financial Guidance
Silk Road Medical is not providing annual guidance for 2020 given the continued uncertainty related to the COVID-19 pandemic.

Conference Call
Silk Road Medical will host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Tuesday, November 10, 2020 to discuss its third quarter 2020 financial results. The call may be accessed through an operator by calling (844) 883-3861 for domestic callers and (574) 990-9820 for international callers using conference ID: 3146919. A live and archived webcast of the event will be available at https://investors.silkroadmed.com/.  

About Silk Road Medical
Silk Road Medical, Inc. (NASDAQ: SILK), is a medical device company located in Sunnyvale, California, that is focused on reducing the risk of stroke and its devastating impact. The company’s flagship procedure, TransCarotid Artery Revascularization (TCAR), is clinically proven to treat blockages in the carotid artery at risk of causing a stroke. For more information on how Silk Road Medical is delivering brighter patient outcomes through brighter clinical thinking, visit www.silkroadmed.com and connect on Twitter, LinkedIn and Facebook.        

Forward-Looking Statements
This press 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 statements include statements regarding the impact of COVID-19 on our business, financial guidance, progress made on achieving our corporate goals, and the overall strength of our business and culture. 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 risks described in the section entitled Risk Factors and elsewhere in our filing made with the Securities and Exchange Commission in Silk Road’s Quarterly Report on Form 10-Q filing made with the Securities and Exchange Commission on August 13, 2020. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. Silk Road Medical disclaims any obligation to update these forward-looking statements.

Investors:
Lynn Lewis or Caroline Paul
Gilmartin Group
investors@silkroadmed.com

Media:
Michael Fanucchi
Silk Road Medical
mfanucchi@silkroadmed.com

SILK ROAD MEDICAL, INC.
Statements of Operations Data
(Unaudited, in thousands, except share and per share data)

				Three Months Ended September 30,								Nine Months Ended September 30,
				2020				2019				2020				2019
Revenue				$	20,067			$	17,026			$	54,093			$	44,721
Cost of goods sold					5,488				4,170				16,074				11,206
		Gross profit			14,579				12,856				38,019				33,515
Operating expenses:
	Research and development				4,711				3,187				11,232				9,008
	Selling, general and administrative				19,202				17,064				54,652				45,064
		Total operating expenses			23,913				20,251				65,884				54,072
		Loss from operations			(9,334	)			(7,395	)			(27,865	)			(20,557	)
Interest income					249				565				951				1,215
Interest expense					(1,215	)			(1,176	)			(3,620	)			(3,736	)
Remeasurement of warrant liability and other income (expense), net					(15	)			(1	)			(74	)			(21,046	)
		Net loss			(10,315	)			(8,007	)			(30,608	)			(44,124	)
Other comprehensive loss:
	Unrealized gain (loss) on investments, net				(164	)			-				150				-
Net change in other comprehensive loss					(164	)			-				150				-
Net loss and comprehensive loss				$	(10,479	)		$	(8,007	)		$	(30,458	)		$	(44,124	)
Net loss per share, basic and diluted				$	(0.31	)		$	(0.26	)		$	(0.94	)		$	(2.18	)
Weighted average common shares used to compute net loss per share, basic and diluted					33,757,599				30,764,354				32,597,007				20,249,580

SILK ROAD MEDICAL, INC.
Balance Sheets Data
(Unaudited, in thousands)

								September 30, 2020				December 31, 2019
Assets
Current assets
	Cash and cash equivalents							$	62,468			$	39,181
	Short-term investments								91,442				51,508
	Accounts receivable, net								9,398				8,601
	Inventories								10,946				10,322
	Prepaid expenses and other current assets								3,443				2,878
					Total current assets				177,697				112,490
	Long-term investments								-				18,224
	Property and equipment, net								2,824				2,734
	Restricted cash								310				310
	Other non-current assets								2,997				3,644
					Total assets			$	183,828			$	137,402
Liabilities and stockholders' equity
Current liabilities
	Accounts payable							$	2,046			$	1,898
	Accrued liabilities								13,008				15,034
					Total current liabilities				15,054				16,932
	Long-term debt								45,160				44,879
	Other liabilities								3,876				3,700
					Total liabilities				64,090				65,511
Stockholders' equity
	Preferred stock, $0.001 par value								-				-
	Common stock, $0.001 par value								34				31
Additional paid-in capital									341,687				263,384
Accumulated other comprehensive income									152				2
Accumulated deficit									(222,135	)			(191,526	)
					Total stockholders' equity				119,738				71,891
					Total liabilities and stockholders' equity			$	183,828			$	137,402

FAQ

What were Silk Road Medical's Q3 2020 revenues?

Silk Road Medical reported Q3 2020 revenues of $20.1 million, an 18% increase from the previous year.

How did the gross margin change in Q3 2020 for SILK?

The gross margin for Q3 2020 declined to 73%, down from 76% in Q3 2019.

What was the net loss for Silk Road Medical in Q3 2020?

The net loss for Q3 2020 was $10.3 million, or $0.31 per share, compared to a loss of $8.0 million in Q3 2019.

Is Silk Road Medical providing annual guidance for 2020?

Silk Road Medical is not providing annual guidance for 2020 due to ongoing uncertainty related to the COVID-19 pandemic.