Aurora Spine Corporation (“Aurora Spine” or the “Company”) (TSXV:
ASG) (OTCQB: ASAPF), a designer and manufacturer of innovative
medical devices that improve spinal surgery outcomes, today
announced the financial results for the second quarter ended June
30, 2021. All figures are in U.S. dollars.
Business Highlights
- Revenues for second
quarter 2021 increased 53.5% over Q2 2020 to $2.43 million
- Continue to sell
more proprietary Aurora products, 64.5% were proprietary during Q2
of 2021, versus 47.0% in Q2 of 2020.
- Received
Institutional Review Board (IRB) approval to commence registration
for multicenter study of its SiLO™ Device for SI Joint
Pain.
- Subsequent to second
quarter end, company received FDA 510(k) clearance for
DEXA-C™ Cervical Interbody System.
- Company has
commenced patient enrollment for multicenter study of ZIP®
Interspinous Fixation Device.
Management Commentary
Mr. Trent Northcutt, President and Chief
Executive Officer of Aurora Spine, stated, “Our second quarter was
another improved quarter for Aurora, as the company continued to
get back to pre-covid revenue levels. That said, while pandemic
headwinds still persist, we continue to be highly focused on
developing more proprietary products. In addition, we are investing
on proving out our proprietary products and have embarked on
conducting multicenter studies of two key products: the Zip and
SiLO. Our goal is to develop and prove that Aurora’s products are
best for patients and surgeons alike. We have focused resources in
our new division, Aurora Pain, which his focused specifically on
the emerging pain care market. We believe Aurora is well positioned
to capitalize on the emergence of the pain interventionalist
market, as interventionalists are looking for solutions to treat
patients suffering from back pain in a minimally invasive method.
As we develop this new vertical, we anticipate improving margins
over the long-term by selling more proprietary products.”
Mr. Northcutt added, “We continue to monitor the
pace of elective surgeries due to the Covid-19 delta variant, which
has created some disruptions, we are focused on the long-term
industry trends, which point to providing better and efficient
healthcare to patients. Aurora has been focused on developing new,
proprietary products. One example of this is our first Dexa-based
product, DEXA-C, a new line of cervical cages for anterior cervical
discectomy with fusion (ACDF) procedures, which was recently
received FDA clearance. This approval was of utmost importance as
it was the first product using Aurora's patented DEXA technology.
This patented technology allows us to create a series of implants
manufactured with varying densities in order to match a patient's
bone density and DEXA T-Score, which should provide superior
fixation and promote quicker bone growth. We have begun to produce
the product and anticipate it reaching the market in the coming
months. We also are developing and awaiting approval of a non-bone
version of our SI Joint device, called SiLO-TFX™, which is highly
anticipated among our customers. We continue to be very optimistic
about the future and expect to launch of several new products and
initiatives during the remainder of fiscal 2021.”
Mr. Chad Clouse, Chief Financial Officer of
Aurora Spine, added, “Revenue momentum continued into the second
quarter as more elective surgeries were performed coming out of the
winter wave of Covid. The financial performance of the company
shows a transitioning from third party products to selling more
newly approved products that are proprietary to Aurora. Expenses
increased in the quarter as we prepare for the launch of new
products under FDA review. We believe these expenditures will
create renewed growth and long-term profitability for the
company.”
Outlook
While the company doesn’t issue formal guidance,
improved revenue growth should resume during the remainder of
fiscal 2021. The company believes that revenues in 2021 should be
improved relative to 2020 levels. The company is investing for the
future by improving sales and marketing efforts to achieve higher
revenues. Margins should also improve as more proprietary products
are approved and sold into the marketplace. The company is
cautiously optimistic that as the pandemic subsides, elective
surgeries should continue to recover. While the scheduling of these
procedures has been inconsistent in the past year and continue to
be so with the delta variant, the pain that patients are
experiencing hasn’t disappeared and many of the procedures are
going to be resolved at some point. Aurora is well positioned to
help pain interventionalists and spine/neurosurgeons and offer them
the latest technologies to safely and quickly improve their
patient’s lives.
Financial Results
Total revenues for the second quarter of 2021
were $2.425 million and increase of 53.5% when compared to $1.580
million in the second quarter of 2020, and 7.2% sequential
improvement from $2.262 million for the first quarter of 2021.
Improvement in revenues were from more elective surgeries being
conducted coming out of the winter covid wave and prior year
lockdowns.
Gross margin on total revenues were 41.4% for
the second quarter of 2021, compared to 40.9% during the second
quarter of 2020. There was a slight improvement in gross margin was
attributable to the company’s strategy of converting third party
product sales to more proprietary, Aurora Spine products, but
margins were impacted by some interim headwinds from additional
shipping costs for moving sets more often, higher royalty expenses
and supply chain issues from remaining third party products.
Total operating expenses were $1.879 million for
the second quarter of 2021, which included $0.180 million of
non-cash expenses, compared to $0.831 million, which included
$0.132 million of non-cash expenses for the second quarter of 2020.
The change in operating expenses were elevated during the quarter
as the company incurred higher general and administrative, research
and development expenses related to new studies and marketing and
professional fees related to the launch of three new products.
EBITDAC (a non-GAAP figure non IFRS measure
defined as Earnings before Interest, Tax, Depreciation,
Amortization and Stock based compensation) was $(0.48) million for
the second quarter of 2021, compared to $(0.05) million in the
second quarter of 2020.
Net loss was $(0.70) million for the second
quarter of 2021, compared to a net gain of $0.03 million in the
second quarter of 2020. Basic and diluted net income per share was
$(0.01) per share in the second quarter of 2021 and $0.00 per share
for the second quarter of 2020.
Full financial statements can be found on SEDAR
at (www.sedar.com).
SELECTED BALANCE SHEET
INFORMATION
The following table summarizes selected key
financial data.
As at |
June 30, 2021$ |
March 31, 2021$ |
December 31, 2020$ |
Cash |
644,325 |
1,175,638 |
1,710,146 |
Trade receivables |
1,713,363 |
2,032,889 |
1,658,124 |
Prepaid expenses and deposits |
634,260 |
297,001 |
231,256 |
Inventory |
1,651,108 |
1,601,190 |
1,596,365 |
Current assets |
4,643,056 |
5,106,718 |
5,195,891 |
Intangible assets |
861,639 |
865,292 |
868,946 |
Property and equipment |
1,117,786 |
1,055,574 |
1,090,312 |
Total assets |
6,622,481 |
7,027,584 |
7,155,149 |
Current liabilities |
2,042,440 |
1,797,782 |
1,561,471 |
Long-term liabilities |
2,312,693 |
2,311,580 |
2,312,374 |
Share capital |
22,007,831 |
22,007,747 |
22,007,747 |
SELECTED QUARTERLY INFORMATION
The Company’s functional currency is the US
dollar (USD). The functional currency of the Company’s US
subsidiary Aurora is USD.
Operating results for each quarter for the last two fiscal years
are presented in the table below.
Quarters ended |
June 30, 2021$ |
March 31, 2021$ |
December 31, 2020$ |
September 30, 2020$ |
June 30, 2020$ |
March 31, 2020$ |
December 31, 2019$ |
September 30, 2019$ |
Revenue |
2,425,397 |
|
2,261,890 |
|
2,437,228 |
|
2,368,692 |
|
1,580,450 |
|
2,259,251 |
|
2,632,649 |
|
2,530,602 |
|
Cost of goods sold |
(1,421,393 |
) |
(1,151,572 |
) |
(1,533,983 |
) |
(1,230,824 |
) |
(934,058 |
) |
(1,478,037 |
) |
(2,550,418 |
) |
(1,518,986 |
) |
Gross profit |
1,004,004 |
|
1,110,318 |
|
903,245 |
|
1,137,868 |
|
646,392 |
|
781,214 |
|
82,231 |
|
1,011,616 |
|
Operating expenses |
1,879,479 |
|
1,672,131 |
|
1,400,165 |
|
1,146,672 |
|
831,239 |
|
1,341,757 |
|
669,399 |
* |
1,429,015 |
|
EBITDAC** |
(480,837 |
) |
(191,430 |
) |
185,104 |
|
477,060 |
|
170,549 |
|
(294,721 |
) |
(837,587 |
) |
(116,189 |
) |
Net income (loss) |
(700,405 |
) |
(386,743 |
) |
(42,181 |
) |
336,163 |
|
34,475 |
|
(560,543 |
) |
(587,168 |
) |
(417,399 |
) |
Basic and diluted income (loss) per share*** |
(0.01 |
) |
(0.01 |
) |
(0.00 |
) |
0.01 |
|
0.00 |
|
(0.01 |
) |
(0.03 |
) |
(0.01 |
) |
* Adjusted by gains and
(losses) on sale of equipment.** EBITDAC is a
non-GAAP, non IFRS measure defined as Earnings before Interest,
Tax, Depreciation, Amortization and Stock based compensation. This
amount includes Gains (losses) on sale of property and equipment
and Other income (expense).*** Outstanding options
and warrants have not been included in the calculation of the
diluted loss per share as they would have the effect of being
anti-dilutive.
About Aurora Spine
Aurora Spine is focused on bringing new
solutions to the spinal implant market through a series of
innovative, minimally invasive, regenerative spinal implant
technologies. Additional information can be accessed at
www.aurora-spine.com or www.aurorapaincare.com.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Statements
This news release contains forward-looking
information that involves substantial known and unknown risks and
uncertainties, most of which are beyond the control of Aurora
Spine, including, without limitation, those listed under "Risk
Factors" and "Cautionary Statement Regarding Forward-Looking
Information" in Aurora Spine's final prospectus (collectively,
"forward-looking information"). Forward-looking information in this
news release includes information concerning the proposed use and
success of the company’s products in surgical procedures. Aurora
Spine cautions investors of Aurora Spine's securities about
important factors that could cause Aurora Spine's actual results to
differ materially from those projected in any forward-looking
statements included in this news release. Any statements that
express, or involve discussions as to, expectations, beliefs,
plans, objectives, assumptions or future events or performance are
not historical facts and may be forward-looking and may involve
estimates, assumptions and uncertainties which could cause actual
results or outcomes to differ unilaterally from those expressed in
such forward-looking statements. No assurance can be given that the
expectations set out herein will prove to be correct and,
accordingly, prospective investors should not place undue reliance
on these forward-looking statements. These statements speak only as
of the date of this press release and Aurora Spine does not assume
any obligation to update or revise them to reflect new events or
circumstances.
Contact:
Aurora Spine CorporationTrent NorthcuttPresident
and Chief Executive Officer(760) 424-2004
Chad ClouseChief Financial Officer(760)
424-2004www.aurora-spine.com
Adam LowensteinerLYTHAM PARTNERS, LLCPhoenix |
New YorkTelephone: 646-829-9700asapf@lythampartners.com
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