Cesca Therapeutics Reports Fourth Quarter and Fiscal 2016 Year End Results
September 20 2016 - 3:57PM
Cesca Therapeutics Inc. (NASDAQ:KOOL), an autologous cell-based
regenerative medicine company, today reported fourth quarter and
full year financial results for fiscal 2016 and provided an update
to investors.
Fourth Quarter 2016 Financial
Results
Net revenues for the quarter ended June 30, 2016
were $3.0 million, compared to $3.7 million in the same period last
year. The decline in net revenues was primarily the result of
a decrease in BioArchive device sales. Also contributing to
the decline was a reduction in ResQ sales related to our June 2015
decision to withdraw ResQ from the market. These decreases were
partially offset by an increase in AXP sales.
Gross profit was $941 thousand for the 4th quarter
of FY2016 compared to $879 thousand for the same quarter in the
prior year. The Company increased its gross profit percentage from
24% to 32% despite a decrease in revenues as the result of lower
personnel expenses and other cost-saving initiatives, partially
offset by a change in the mix of products sold.
Operating expenses for the quarter ended June 30,
2016 were $3.2 million compared to $3.3 million for the same
quarter last year. The decrease in operating expenses was primarily
attributable to lower personnel costs and reduced spending for
clinical programs tied to the deferral of the start of
the Company’s FDA approved phase III clinical trial for
critical limb ischemia (CLI).
Net loss for the quarter ended June 30, 2016 was
$3.7 million compared to $2.4 million for the same quarter in the
prior year. The increase in net loss was attributable to non-cash,
financing and interest costs associated with the February 2016
$12.5 million convertible debenture.
Full Year Fiscal 2016 Financial
Results
Net revenues for 2016 were $11.9 million compared
to $16.0 million for 2015, a decrease of $4.1 million. The
decline was primarily attributable to softness in BioArchive unit
sales since we shipped ten fewer devices during the year ended June
30, 2016 than we did in the year ended June 30, 2015, and
diminished Res-Q sales as a result of our June 2015 decision to
withdraw the product from the market.
Gross profit was $2.7 million or 23% of revenues
for 2016 compared to $4.7 million or 30% of revenues for
2015. Our gross profit declined primarily due to changes in
the mix of products sold and increases in inventory reserves. The
Company expects gross profit percentage to return to normal levels
in fiscal 2017.
Operating expenses for 2016 were $13.6 million
compared to $19.6 million for 2015, a decrease of $6.0 million. The
decrease in operating expense was primarily attributable to
reductions in legal expenses of approximately $2.9 million as a
result of the settlement of certain patent litigation cases in
2015, lower personnel and other costs attributable to our
cost-saving initiatives and deferral of spending associated with
our CLI and other clinical programs.
Net loss from operations for 2016 was $10.9 million
compared to $14.9 million for 2015, a decrease of $4.0 million. The
reduction in net loss from operations was due to the significant
decrease in overall operating expenses partially offset by a
decrease in gross profit as already described.
Net loss for 2016 was $18.6 million compared to
$14.9 million for 2015, an increase of $3.7 million. The increase
in net loss was primarily the result of charges associated with two
debenture transactions, partially offset by improvement in net loss
from operations as already described.
Adjusted EBITDA loss (a non-GAAP measurement) was
$9.0 million for 2016, compared to $12.1 million for 2015. The
reduction in the adjusted EBITDA loss was due primarily to the
reduction in net loss from operations as already described.
At June 30, 2016, the Company had cash and cash
equivalents of $5.8 million and working capital of $7.3
million. This compared to cash and cash equivalents of $3.3
million and working capital of $5.3 million at June 30, 2015.
In August 2016, the Company sold 600,000 shares of common stock for
net proceeds of $2.2 million. Based upon the cash balance,
the August 2016 financing, as well as expected outflows and
projections for revenues, the Company believes it have sufficient
cash to provide for its operations and working capital requirements
for at least the next 12 months.
Company’s Conference Call and
Webcast
Management will host a conference call on Tuesday,
September 20, 2016 at 2:00 PM Pacific (5:00 PM Eastern).
The call can be accessed by dialing
1-800-860-2442 within the U.S. or 1-412-858-4600 outside
the U.S. and referencing, “Cesca”. Mr. Robin
Stracey, Chief Executive Officer and Mr. Michael Bruch, Chief
Financial Officer will be on the call to discuss the fourth quarter
results and other corporate events, followed by a Q&A
session. Participants are asked to call the assigned number
approximately five minutes before the conference call
begins.
To listen to the audio webcast of the call during
or after the event, please visit:
http://services.choruscall.com/links/kool160920
ReplayA replay of the conference
call will be available two hours after the call for the following
five business days by dialing 1-877-344-7529 within the
U.S. or 1-412-317-0088 outside the U.S. and entering the
following account number when prompted
‘10092230’.
About Cesca Therapeutics Inc.Cesca
Therapeutics Inc. (www.cescatherapeutics.com) is engaged in the
research, development, and commercialization of cellular therapies
and delivery systems for use in regenerative medicine. The Company
is a leader in the development and manufacture of automated blood
and bone marrow processing systems that enable the separation,
processing and preservation of cell and tissue therapeutics.
These include:
- The SurgWerks™ System (in development) - a
proprietary system comprised of the SurgWerks Processing Platform,
including devices and analytics, and indication-specific SurgWerks
Procedure Kits for use in regenerative stem cell
therapy at the point-of-care for vascular and orthopedic
diseases.
- The CellWerks™ System (in development) - a
proprietary cell processing system with associated analytics for
intra-laboratory preparation of adult stem cells from bone marrow
or blood.
- The AutoXpress® System (AXP®) - a proprietary
automated device and companion sterile disposable for concentrating
hematopoietic stem cells from cord blood.
- The MarrowXpress™ System
(MXP™) - a derivative product of the AXP and its accompanying
sterile disposable for the isolation and concentration of
hematopoietic stem cells from bone marrow.
- The BioArchive® System - an automated
cryogenic device used by cord blood banks for the cryopreservation
and storage of cord blood stem cell concentrate for future
use.
- Manual bag sets for use in the processing and
cryogenic storage of cord blood.
Forward-Looking StatementThe
statements contained herein may include statements of future
expectations and other forward-looking statements that are based on
management’s current views and assumptions and involve known and
unknown risks and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or
implied in such statements. A more complete description of risks
that could cause actual events to differ from the outcomes
predicted by Cesca Therapeutics' forward-looking statements is set
forth under the caption "Risk Factors" in Cesca Therapeutics annual
report on Form 10-K and other reports it files with the Securities
and Exchange Commission from time to time, and you should consider
each of those factors when evaluating the forward-looking
statements.
Financials
Cesca Therapeutics Inc. |
Condensed Consolidated Balance Sheets |
|
(in thousands) |
|
June 30, 2016 |
|
June 30, 2015 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,835 |
|
|
$ |
3,357 |
|
|
Accounts receivable, net |
|
|
3,169 |
|
|
|
5,133 |
|
|
Inventories |
|
|
3,593 |
|
|
|
4,598 |
|
|
Prepaid expenses and other current
assets |
|
|
246 |
|
|
|
163 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
12,843 |
|
|
|
13,251 |
|
|
|
|
|
|
|
|
Equipment, net |
|
|
2,962 |
|
|
|
2,937 |
|
|
Goodwill |
|
|
13,195 |
|
|
|
13,195 |
|
|
Intangible assets,
net |
|
|
20,821 |
|
|
|
21,295 |
|
|
Other assets |
|
|
78 |
|
|
|
79 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
49,899 |
|
|
$ |
50,757 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
2,648 |
|
|
$ |
5,079 |
|
|
Other current liabilities |
|
|
2,894 |
|
|
|
2,867 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
5,542 |
|
|
|
7,946 |
|
|
|
|
|
|
|
|
Long-term liabilities |
|
|
12,084 |
|
|
|
7,909 |
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
32,273 |
|
|
|
34,902 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’
equity |
|
$ |
49,899 |
|
|
$ |
50,757 |
|
|
|
|
|
|
|
|
|
|
|
|
Cesca Therapeutics Inc. |
Condensed Consolidated Statements of
Operations |
(Unaudited) |
|
(in
thousands) |
Three Months Ended June 30, |
|
Year Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
2,980 |
|
|
$ |
3,702 |
|
|
$ |
11,929 |
|
|
$ |
16,042 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
2,039 |
|
|
|
2,823 |
|
|
|
9,185 |
|
|
|
11,293 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
941 |
|
|
|
879 |
|
|
|
2,744 |
|
|
|
4,749 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
452 |
|
|
|
658 |
|
|
|
2,148 |
|
|
|
2,974 |
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
779 |
|
|
|
1,208 |
|
|
|
3,230 |
|
|
|
5,939 |
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
1,952 |
|
|
|
1,398 |
|
|
|
8,231 |
|
|
|
10,695 |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
3,183 |
|
|
|
3,264 |
|
|
|
13,609 |
|
|
|
19,608 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(2,242 |
) |
|
|
(2,385 |
) |
|
|
(10,865 |
) |
|
|
(14,859 |
) |
|
|
|
|
|
|
|
|
|
Amortization of debt
discount |
|
|
(938 |
) |
|
|
-- |
|
|
|
(6,127 |
) |
|
|
-- |
|
Fair value change of
derivative instruments |
|
|
243 |
|
|
|
-- |
|
|
|
3,395 |
|
|
|
-- |
|
Registration rights
liquidated damages |
|
|
-- |
|
|
|
-- |
|
|
|
(1,100 |
) |
|
|
-- |
|
Loss on cashless exercise
of warrants |
|
|
-- |
|
|
|
-- |
|
|
|
(1,039 |
) |
|
|
-- |
|
Loss on extinguishment of
debt |
|
|
-- |
|
|
|
-- |
|
|
|
(795 |
) |
|
|
-- |
|
Loss on modification of
Series A warrants |
|
|
-- |
|
|
|
-- |
|
|
|
(149 |
) |
|
|
-- |
|
Interest and other |
|
|
(757 |
) |
|
|
9 |
|
|
|
(1,908 |
) |
|
|
7 |
|
Net loss |
|
($ |
3,694 |
) |
|
($ |
2,376 |
) |
|
($ |
18,588 |
) |
|
($ |
14,852 |
) |
|
|
|
|
|
|
|
|
|
Cesca Therapeutics Inc. |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
|
(in thousands) |
Years EndedJune 30, |
|
|
2016 |
|
|
|
2015 |
|
Cash flows from
operating activities: |
|
|
|
Net cash used in operating
activities |
($ |
9,625 |
) |
|
($ |
10,649 |
) |
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
|
(710 |
) |
|
|
(587 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Gross proceeds from convertible
debentures |
|
18,000 |
|
|
|
-- |
|
Payment of financing
cost-convertible debentures |
|
(961 |
) |
|
|
-- |
|
Repayment of convertible
debentures |
|
(6,444 |
) |
|
|
-- |
|
Payment to extinguish derivative
obligations |
|
(159 |
) |
|
|
-- |
|
Payments on capital lease
obligations |
|
(67 |
) |
|
|
(60 |
) |
Proceeds from issuance of common
stock, net |
|
2,463 |
|
|
|
-- |
|
Repurchase of common stock |
|
(8 |
) |
|
|
(129 |
) |
|
|
|
|
Net cash provided by (used in)
financing activities |
|
12,824 |
|
|
|
(189 |
) |
|
|
|
|
Effects of foreign
currency rate changes on cash and cash equivalents |
|
(11 |
) |
|
|
(29 |
) |
Net increase (decrease)
in cash and cash equivalents |
|
2,478 |
|
|
|
(11,454 |
) |
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
3,357 |
|
|
|
14,811 |
|
Cash and cash
equivalents at end of period |
$ |
5,835 |
|
|
$ |
3,357 |
|
|
|
|
|
Cesca Therapeutics Inc. |
Adjusted EBITDA |
(Unaudited) |
|
(in
thousands) |
|
Three Months Ended June 30, |
|
Year Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Loss from operations |
|
($ |
2,242 |
) |
|
($ |
2,385 |
) |
|
($ |
10,865 |
) |
|
($ |
14,859 |
) |
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
292 |
|
|
|
338 |
|
|
|
1,168 |
|
|
|
1,351 |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
expense |
|
|
191 |
|
|
|
281 |
|
|
|
742 |
|
|
|
1,247 |
|
|
|
|
|
|
|
|
|
|
Impairment of intangible asset |
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
117 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA loss |
|
($ |
1,759 |
) |
|
($ |
1,766 |
) |
|
($ |
8,955 |
) |
|
($ |
12,144 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Contact: Cesca Therapeutics Inc.
ir@cescatherapeutics.com
Investor Contact: The Ruth Group
Lee Roth / Tram Bui
646-536-7012 / 7035
lroth@theruthgroup.com / tbui@theruthgroup.com
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