Entellus Medical, Inc. ("Entellus Medical" or the "Company")
(Nasdaq:ENTL), a medical technology company focused on the design,
development and commercialization of products for the minimally
invasive treatment of chronic and recurrent sinusitis patients in
the physician office setting or operating room, today reported its
financial results for the three months and year ended December 31,
2014.
Recent Highlights and Accomplishments
- Achieved net revenue of $48.8 million in 2014, an increase of
50% year-over-year
- Released XprESS™ Ultra Multi-Sinus Dilation System, the third
device in the XprESS family of balloon sinus dilation systems
- On January 29, 2015 Entellus Medical's common stock began
trading on the NASDAQ Global Market following the pricing of its
initial public offering of approximately 5.3 million shares raising
net proceeds of approximately $81.2 million
- Expanded field sales organization to 103 persons as of December
31, 2014
- Surpassed halfway enrollment point for IDE clinical study to
treat pediatric patients with the XprESS device
- Enrolled first patient in IDE clinical study to treat
Eustachian tube dysfunction with the XprESS device
"The fourth quarter capped off a very productive year for
Entellus Medical. Physician awareness and utilization of our XprESS
family of products continued to grow throughout the year, resulting
in strong revenue growth in the fourth quarter and for the full
year 2014," said Brian Farley, Chairman and Chief Executive
Officer. "After recently completing a successful initial public
offering, we believe we are well-positioned to grow the market for
physician office-based treatment of patients suffering from
sinusitis and to provide our highly efficacious solution that
reduces costs to the healthcare system and to patients."
Fourth Quarter 2014 Financial Results
Revenue for the three months ended December 31, 2014 increased
35% to $14.5 million from $10.7 million during the same period of
the prior year. The growth in revenue was primarily attributable to
an increase of approximately $3.5 million in sales of the XprESS
family of products.
Gross margin for the fourth quarter of 2014 increased to 77.6%,
compared to 76.4% for the same period in 2013. Operating expenses
for the fourth quarter of 2014 were $12.0 million, an increase of
21% compared to $9.9 million for the same period of the prior year.
The increase in gross margin was primarily due to increased unit
sales, which allowed the Company to spread the fixed portion of
manufacturing overhead costs over more production units. The
increase in operating expenses was primarily due to compensation
and other employee-related expenses resulting from increased
headcount in our sales and marketing organizations.
Net loss for the three months ended December 31, 2014 was $1.2
million, or $0.73 per share, compared with net loss of $2.2
million, or $1.71 per share, for the three months ended December
31, 2013.
Full Year 2014 Financial Results
Revenue increased $16.3 million, or 50%, to $48.8 million during
the year ended December 31, 2014, compared to $32.5 million during
the year ended December 31, 2013. The growth in revenue was
primarily attributable to an increase of approximately $15.7
million in sales of the XprESS family of products and $0.9 million
in sales of XeroGel products offset in part by a decrease of $0.3
million from all other products.
Gross Margin increased to 78.0% for the year ended December 31,
2014, compared to 76.0% for the year ended December 31, 2013. The
increase in gross margin was primarily due to increased unit sales,
which allowed the Company to spread the fixed portion of
manufacturing overhead costs over more production units.
Total operating expenses were $43.2 million during the year
ended December 31, 2014, an increase of 16%, compared to $37.1
million during the year ended December 31, 2013. The primary driver
of this increase was compensation and other employee-related
expenses due to increased headcount in our sales and marketing
organizations.
Net loss for the year ended December 31, 2014 was $6.9 million,
or $4.62 per share, compared with net loss of $13.4 million, or
$11.82 per share, for the year ended December 31, 2013.
Entellus Medical ended the fourth quarter of 2014 with $3.5
million in cash and cash equivalents. In February 2015, the Company
completed the initial public offering of its common stock, which
raised net proceeds of approximately $81.2 million, after deducting
underwriting discounts and commissions and offering expenses.
2015 Financial Outlook
Entellus Medical estimates that first quarter 2015 revenue will
range from approximately $12.9 million to $13.4 million, which
would represent annual growth of 27% to 32%. The Company expects
that gross margin for the first quarter of 2015 will range from 77%
to 78% compared to 77.4% in the first quarter of 2014. First
quarter operating expenses are expected to increase by
approximately $3.0 to $3.5 million from the fourth quarter of 2014,
primarily due to sales and marketing expenses related to the
expansion of the U.S. sales organization, and from general and
administrative expenses associated with the expense of operating as
a public company. First-quarter net loss is estimated to range from
approximately $5.0 million to $6.2 million, or an estimated loss of
$0.40 to $0.49 per share. The estimated net loss for the first
quarter includes estimated non-cash stock-based compensation of
$0.5 million to $0.6 million. The number of weighted average shares
outstanding used to calculate estimated earnings per share for the
first quarter is currently expected to range from approximately
12.5 million to 12.6 million.
Entellus Medical expects that full year 2015 revenue will range
from approximately $58.5 million to $61.0 million, which would
represent annual growth ranging from 20% to 25%. The Company
expects gross margin for the full year 2105 to range from 77% to
78%, compared to 78.0% for the full year 2014. Operating expenses
for the full year 2015 are expected to range from $60 million to
$63 million, including estimated charges for stock-based
compensation expenses of $2.5 million to $2.7 million. Full year
2015 net loss is expected to range from approximately $14.6 million
to $20.0 million, or a loss of $0.84 to $1.17 per share. This
expected loss per share assumes approximately 17.2 million to 17.4
million weighted average shares outstanding for the full year.
Webcast and Conference Call Information
The Company's management team will host a corresponding
conference call beginning today at 1:30pm PT/4:30pm ET to discuss
the financial results and recent business developments. Individuals
interested in listening to the conference call may do so by dialing
(877) 930-5751 for domestic callers or (253) 336-7277 for
international callers, using Conference ID: 92225247. To listen to
a live webcast, please visit the investor relations section of the
Entellus Medical website at: www.entellusmedical.com.
A replay of the call will be available beginning March 17, 2015
at 4:30pm PT/7:30pm ET through midnight on March 18, 2015. To
access the replay, dial (855) 859-2056 or (404) 537-3406 and
reference Conference ID: 92225247. The webcast will also be
available on the Entellus website for one month following the
completion of the call.
About Entellus Medical, Inc.
Entellus Medical is a medical technology company focused on the
design, development and commercialization of products for the
minimally invasive treatment of chronic and recurrent sinusitis
patients in the physician office setting or operating room. Its
XprESS family of products is used by ENT physicians to open
narrowed or obstructed sinus drainage pathways using balloon sinus
dilation. When used as a stand-alone therapy, Entellus Medical's
balloon sinus dilation products are proven in a sufficiently
powered prospective, multicenter, randomized, controlled trial to
be as effective as functional endoscopic sinus surgery, or FESS.
Patients treated with Entellus Medical's products in this trial in
the ENT physician office also experienced faster recovery outcomes
and fewer post-procedure debridements than patients receiving FESS.
Entellus Medical currently markets its products in the United
States and Canada and sells its products through a direct sales
force in the United States.
Forward-Looking Statements
All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, without limitation, statements regarding the
Company's financial outlook and are based on management's current
expectations and involve known and unknown risks and uncertainties
that may cause Entellus Medical's actual financial results,
performance or achievements to be materially different from any
estimated or forecasted future financial results, performance or
achievements expressed or implied by the forward looking
statements. Such risks and uncertainties include, among others, the
company's significant operating expenses incurred since inception
and expected to incur in the future; its dependence on a limited
number of products, including the XprESS family of multi-sinus
products; physicians' willingness to change current practices and
continue to adopt office-based balloon sinus dilation procedures;
inability to maintain adequate levels of coverage or reimbursement
for the procedures using the company's products; the impact of
competition within the industry; the company's substantial
dependence on a key license agreement; and the company's ability to
establish and maintain intellectual property protection for its
products or avoid claims of infringement. Other factors that could
cause actual results to differ materially from those contemplated
in this press release can be found under the caption "Risk Factors"
in the company's Registration Statement on Form S-1 filed with the
Securities and Exchange Commission, or SEC, and its other reports
filed with the SEC. Entellus Medical undertakes no obligation to
update or revise any forward looking statements, even if subsequent
events cause our views to change.
Entellus Medical,
Inc. |
Condensed Statement of
Operations |
(in thousands, except
per share amounts) |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Fiscal Years
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
Revenue |
$ 14,456 |
$ 10,700 |
$ 48,820 |
$ 32,545 |
Cost of goods sold |
3,239 |
2,525 |
10,754 |
7,808 |
Gross profit |
11,217 |
8,175 |
38,066 |
24,737 |
Gross margin |
78% |
76% |
78% |
76% |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Selling and marketing |
8,487 |
7,597 |
32,763 |
27,631 |
Research and development |
1,172 |
1,123 |
4,307 |
5,143 |
General and administrative |
2,330 |
1,222 |
6,097 |
4,311 |
Total operating expenses |
11,989 |
9,942 |
43,167 |
37,085 |
Loss from operations |
(772) |
(1,767) |
(5,101) |
(12,348) |
Other income (expense), net |
(416) |
(449) |
(1,828) |
(1,048) |
Net loss |
$ (1,188) |
$ (2,216) |
$ (6,929) |
$ (13,396) |
|
|
|
|
|
Net loss per share, basic and diluted |
$ (0.73) |
$ (1.71) |
$ (4.62) |
$ (11.82) |
|
|
|
|
|
Weighted average common shares used to
compute net loss per share, basic and diluted |
1,628 |
1,299 |
1,499 |
1,133 |
|
Entellus Medical,
Inc. |
Condensed Balance
Sheet |
(in
thousands) |
(unaudited) |
|
|
|
|
December
31, |
Assets |
2014 |
2013 |
Current Assets |
|
|
Cash & cash equivalents |
$ 3,484 |
$ 7,709 |
Accounts receivable, net |
8,746 |
5,823 |
Inventories |
2,439 |
1,869 |
Prepaid expenses and other current
assets |
883 |
816 |
Total current assets |
15,552 |
16,217 |
Property and equipment, net |
1,730 |
1,349 |
Other non-current assets |
1,954 |
310 |
Total assets |
$ 19,236 |
$ 17,876 |
|
|
|
Liabilities and stockholders'
deficit |
|
|
Current liabilities |
|
|
Accounts payable |
$ 2,414 |
$ 1,202 |
Preferred stock warrant liability |
291 |
211 |
Accrued expenses |
5,084 |
4,102 |
Total current liabilities |
7,789 |
5,515 |
Long-term liabilities |
|
|
Long-term debt |
20,000 |
15,000 |
Other non-current liabilities |
247 |
35 |
Total liabilities |
28,036 |
20,550 |
Convertible preferred stock |
91,554 |
91,554 |
Total stockholders' deficit |
(100,354) |
(94,228) |
Total liabilities and stockholders'
deficit |
$ 19,236 |
$ 17,876 |
CONTACT: Leigh Salvo
415-513-1281
ir@entellusmedical.com
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