Press Release
TransEnterix, Inc. Reports Operating and Financial Results for the Second Quarter 2018
Recent Highlights
-
Total revenue of
$6.4 million , including the sale of four Senhance Systems -
Received
FDA clearance for expanded indications for use for Senhance System -
Filed
FDA 510(k) submission for additional Senhance System Instruments including 3mm diameter instruments -
Entered into financing agreement providing the company with up to
$40 million in term loans
“Our performance during the second quarter was solid as we continued to
drive system sales both in the U.S. and abroad, while simultaneously
making significant progress towards our 2018 goals, including the
expansion of Senhance’s indications for use and broadening our portfolio
of instruments,” said
Commercial and Clinical Update
In the quarter ended
On
On
Second Quarter Financial Highlights
For the three months ended
For the three months ended
For the three months ended
For the three months ended
On
The Company had cash and restricted cash of approximately
Conference Call
About
Non-GAAP Measures
The adjusted net loss and adjusted net loss per share presented in this press release are non-GAAP measures. The adjustments relate to the gain from sale `of SurgiBot assets, amortization of intangible assets, change in fair value of contingent consideration, change in fair value of warrant liabilities, and loss on extinguishment of debt. These financial measures are presented on a basis other than in accordance with U.S. generally accepted accounting principles ("Non-GAAP Measures"). In the tables that follow under "Reconciliation of Non-GAAP Measures,” we present adjusted net loss and adjusted net loss per share, reconciled to their comparable GAAP measures. These items are adjusted because they are not operational or because these charges are non-cash or non-recurring and management believes these adjustments are meaningful to understanding the Company's performance during the periods presented. These Non-GAAP Measures should be considered a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP.
Forward-Looking Statements
This press release includes statements relating to the 2018 second
quarter results and plans for 2018 and beyond. These statements and
other statements regarding our future plans and goals constitute
"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 are intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of 1995.
Such statements are subject to risks and uncertainties that are often
difficult to predict, are beyond our control and which may cause results
to differ materially from expectations and include whether we have made
significant progress towards our 2018 goals, including the expansion of
Senhance’s indications for use and broadening our portfolio of
instruments; whether we can leverage the significant progress from the
first half of the year to drive increased global adoption of our
Senhance System and whether the Company has sufficient cash to fund the
business into 2020, exclusive of the
|
TransEnterix, Inc. |
||||||||||||||||
| Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||||||
| (in thousands except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue | $ | 6,389 | $ | 1,584 | $ | 11,156 | $ | 3,530 | ||||||||
| Cost of revenue | 3,732 | 972 | 6,287 | 2,306 | ||||||||||||
| Gross profit | 2,657 | 612 | 4,869 | 1,224 | ||||||||||||
| Operating Expenses (Income) | ||||||||||||||||
| Research and development | 5,281 | 5,070 | 10,546 | 11,925 | ||||||||||||
| Sales and marketing | 6,046 | 3,749 | 12,016 | 7,472 | ||||||||||||
| General and administrative | 3,627 | 2,719 | 6,303 | 5,768 | ||||||||||||
| Amortization of intangible assets | 2,743 | 1,687 | 5,570 | 3,323 | ||||||||||||
| Change in fair value of contingent consideration | 812 | (774 | ) | 1,439 | 453 | |||||||||||
| Issuance costs for warrants | — | 627 | — | 627 | ||||||||||||
| Gain from sale of SurgiBot assets, net | 37 | — | (11,959 | ) | — | |||||||||||
| Total Operating Expenses (Income) | 18,546 | 13,078 | 23,915 | 29,568 | ||||||||||||
| Operating Loss | (15,889 | ) | (12,466 | ) | (19,046 | ) | (28,344 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Change in fair value of warrant liabilities | (17,507 | ) | (2,326 | ) | (15,678 | ) | (2,326 | ) | ||||||||
| Interest expense, net | (1,736 | ) | (622 | ) | (2,122 | ) | (956 | ) | ||||||||
| Other income (expense) | 1 | (40 | ) | (57 | ) | (100 | ) | |||||||||
| Total Other Income (Expense), net | (19,242 | ) | (2,988 | ) | (17,857 | ) | (3,382 | ) | ||||||||
| Loss before income taxes | $ | (35,131 | ) | $ | (15,454 | ) | $ | (36,903 | ) | $ | (31,726 | ) | ||||
| Income tax benefit | 883 | 741 | 1,773 | 1,599 | ||||||||||||
| Net loss | $ | (34,248 | ) | $ | (14,713 | ) | $ | (35,130 | ) | $ | (30,127 | ) | ||||
| Other comprehensive loss | ||||||||||||||||
| Foreign currency translation (loss) gain | (4,398 | ) | 5,430 | (2,090 | ) | 6,563 | ||||||||||
| Comprehensive loss | $ | (38,646 | ) | $ | (9,283 | ) | $ | (37,220 | ) | $ | (23,564 | ) | ||||
| Net loss per share - basic and diluted | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.17 | ) | $ | (0.24 | ) | ||||
|
Weighted average common shares outstanding - basic and diluted |
204,504 | 132,386 | 202,214 | 127,052 | ||||||||||||
| TransEnterix, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (in thousands, except share amounts) | ||||||||
| June 30, | December 31, | |||||||
| 2018 | 2017 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 97,743 | $ | 91,217 | ||||
| Accounts receivable, net | 2,210 | 1,536 | ||||||
| Inventories | 11,040 | 10,817 | ||||||
| Interest receivable | 104 | 80 | ||||||
| Other current assets | 7,243 | 9,344 | ||||||
| Total Current Assets | 118,340 | 112,994 | ||||||
| Restricted cash | 750 | 6,389 | ||||||
| Property and equipment, net | 6,676 | 6,670 | ||||||
| Intellectual property, net | 45,909 | 52,638 | ||||||
| Goodwill | 70,813 | 71,368 | ||||||
| Other long term assets | 259 | 192 | ||||||
| Total Assets | $ | 242,747 | $ | 250,251 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 4,108 | $ | 3,771 | ||||
| Accrued expenses | 10,270 | 10,974 | ||||||
| Deferred revenue | 1,083 | 1,088 | ||||||
| Deferred gain from sale of SurgiBot assets | — | 7,500 | ||||||
| Contingent consideration – current portion | 547 | 719 | ||||||
| Notes payable - current portion, net of debt discount | — | 4,788 | ||||||
| Total Current Liabilities | 16,008 | 28,840 | ||||||
| Long Term Liabilities | ||||||||
| Contingent consideration – less current portion | 12,915 | 11,699 | ||||||
| Notes payable - less current portion, net of debt discount | 18,952 | 8,385 | ||||||
| Warrant liabilities | 22,708 | 14,090 | ||||||
| Net deferred tax liabilities | 6,446 | 8,389 | ||||||
| Total Liabilities | 77,029 | 71,403 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
|
Common stock $0.001 par value, 750,000,000 shares authorized at
June 30, 2018 and December 31, 2017; 207,712,291 and 199,282,003 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively |
207 | 199 | ||||||
| Additional paid-in capital | 645,332 | 621,261 | ||||||
| Accumulated deficit | (482,759 | ) | (447,640 | ) | ||||
| Accumulated other comprehensive income | 2,938 | 5,028 | ||||||
| Total Stockholders’ Equity | 165,718 | 178,848 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 242,747 | $ | 250,251 | ||||
| TransEnterix, Inc. | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2018 | 2017 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | (35,130 | ) | $ | (30,127 | ) | ||
|
Adjustments to reconcile net loss to net cash and cash equivalents
used in
operating activities: |
||||||||
| Gain from sale of SurgiBot assets, net | (11,959 | ) | — | |||||
| Depreciation | 1,277 | 1,142 | ||||||
| Amortization of intangible assets | 5,570 | 3,323 | ||||||
| Amortization of debt discount and debt issuance costs | 495 | 43 | ||||||
| Stock-based compensation | 4,204 | 3,679 | ||||||
| Deferred tax benefit | (1,799 | ) | (1,580 | ) | ||||
| Loss on extinguishment of debt | 1,400 | 308 | ||||||
| Change in fair value of warrant liabilities | 15,678 | 2,326 | ||||||
| Change in fair value of contingent consideration | 1,439 | 453 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (762 | ) | (487 | ) | ||||
| Interest receivable | (24 | ) | 39 | |||||
| Inventories | (1,560 | ) | (862 | ) | ||||
| Other current and long term assets | 1,905 | (1,473 | ) | |||||
| Accounts payable | 404 | (1,909 | ) | |||||
| Accrued expenses | (359 | ) | (390 | ) | ||||
| Deferred revenue | 31 | — | ||||||
| Net cash and cash equivalents used in operating activities | (19,190 | ) | (25,515 | ) | ||||
| Investing Activities | ||||||||
| Proceeds related to sale of SurgiBot assets, net | 4,496 | — | ||||||
| Purchase of property and equipment | (358 | ) | (1,397 | ) | ||||
| Purchase of intellectual property | — | (398 | ) | |||||
| Proceeds from sale of property and equipment | 32 | — | ||||||
| Net cash and cash equivalents provided by (used in) investing activities | 4,170 | (1,795 | ) | |||||
| Financing Activities | ||||||||
| Payment of notes payable | (15,305 | ) | (13,343 | ) | ||||
| Proceeds from issuance of debt and warrants, net of issuance costs | 18,870 | 13,196 | ||||||
| Payment of contingent consideration | (395 | ) | — | |||||
| Proceeds from issuance of common stock and warrants, net of issuance costs | 2 | 29,193 | ||||||
| Taxes paid related to net share settlement of vesting of restricted stock units | — | (168 | ) | |||||
| Proceeds from issuance of common stock related to sale of SurgiBot assets | 3,000 | — | ||||||
| Proceeds from exercise of stock options and warrants | 9,813 | — | ||||||
| Net cash and cash equivalents provided by financing activities | 15,985 | 28,878 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (78 | ) | 2 | |||||
| Net increase in cash, cash equivalents and restricted cash | 887 | 1,570 | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | 97,606 | 34,590 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 98,493 | $ | 36,160 | ||||
| Supplemental Disclosure for Cash Flow Information | ||||||||
| Interest paid | $ | 599 | $ | 368 | ||||
| Supplemental Schedule of Noncash Investing and Financing Activities | ||||||||
| Transfer of inventories to property and equipment | $ | 1,055 | $ | — | ||||
| Issuance of common stock as contingent consideration | $ | — | $ | 5,227 | ||||
| Relative fair value of warrants issued with debt | $ | — | $ | 300 | ||||
| Reclass of warrant liability to common stock and additional paid-in capital | $ | 7,060 | $ | — | ||||
| TransEnterix, Inc. | ||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||
| Adjusted Net Loss and Net Loss per Share | ||||||||||||
| (in thousands except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|||||
| (Unaudited, U.S. Dollars, in thousands) | ||||||||||||
| Net loss | $ | (34,248) | $ | (14,713) | $ | (35,130) | $ | (30,127) | ||||
| Adjustments | ||||||||||||
| Gain from sale of SurgiBot assets, net | 37 | — | (11,959) | — | ||||||||
| Amortization of intangible assets | 2,743 | 1,687 | 5,570 | 3,323 | ||||||||
| Change in fair value of contingent consideration | 812 | (774) | 1,439 | 453 | ||||||||
| Change in fair value of warrant liabilities | 17,507 | 2,326 | 15,678 | 2,326 | ||||||||
| Loss on extinguishment of debt | 1,400 | 308 | 1,400 | 308 | ||||||||
| Adjusted net loss | $ | (11,749) | $ | (11,166) | $ | (23,002) | $ | (23,717) | ||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| (Unaudited, per diluted share) |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
||||
| Net loss per share | $ | (0.17) | $ | (0.11) | $ | (0.17) | $ | (0.24) | ||||
| Adjustments | ||||||||||||
| Gain from sale of SurgiBot assets | 0.00 | — | (0.06) | — | ||||||||
| Amortization of intangible assets | 0.01 | 0.02 | 0.03 | 0.03 | ||||||||
| Change in fair value of contingent consideration | 0.00 | (0.01) | 0.00 | 0.00 | ||||||||
| Change in fair value of warrant liabilities | 0.09 | 0.02 | 0.08 | 0.02 | ||||||||
| Loss on extinguishment of debt | 0.01 | 0.00 | 0.01 | 0.00 | ||||||||
| Adjusted net loss per share | $ | (0.06) | $ | (0.08) | $ | (0.11) | $ | (0.19) | ||||
The non-GAAP financial measures for the three and six months ended
a) Gain from sale of SurgiBot assets relates to amounts received from
b) Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 5 to 10 years.
c) Contingent consideration in connection with the acquisition of the Senhance System in 2015 is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
d) The Company’s Series A and Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant. The warrant liability is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
e) In
View source version on businesswire.com: https://www.businesswire.com/news/home/20180807005215/en/
Source:
For TransEnterix, Inc.
Investors:
Mark Klausner, +1
443-213-0501
invest@transenterix.com
or
Media:
Joanna
Rice, +1 951-751-1858
joanna@greymattermarketing.com