Anika Therapeutics, Inc. (NASDAQ: ANIK), a global joint
preservation company in early intervention orthopedics, today
reported financial results for its first quarter ended March 31,
2024.
First Quarter 2024 Financial Summary
- Revenue in the first quarter of 2024 was $40.5 million, up 7%
compared to $37.9 million in the first quarter of 2023.
- OA Pain Management revenue of $24.3 million, up 7%
- Joint Preservation and Restoration revenue of $13.8 million, up
3%
- Non-Orthopedic revenue of $2.4 million, up 29%
- Gross margin was 61%; Adjusted gross margin1 was 62%.
- Net loss was ($4.5) million, or ($0.31) per share, compared to
net loss of ($10.4) million, or ($0.71) per share, in the prior
year period.
- Adjusted net income1 was $1.2 million, or $0.09 per diluted
share, compared to adjusted net loss1 of ($2.2) million, or ($0.14)
per share, in the first quarter of 2023. Adjusted net income (loss)
and adjusted EPS now exclude stock-based compensation, net of tax,
for all periods presented.
- Adjusted EBITDA1 was $2.5 million, compared to ($1.2) million
in the first quarter of 2023.
- Cash used in operations was $0.1 million; ending cash balance
was $68.6 million.
1 See description of non-GAAP financial information contained in
this release.
“With continued strength in our market-leading OA Pain
Management platform, an expanding and highly differentiated
HA-based regenerative solutions pipeline, and continued cost
discipline, we delivered a good start to the year and are on track
to achieve our 2024 guidance,” said Cheryl R. Blanchard, Ph.D.,
Anika’s President and CEO. “While we are still early in the
execution of our refocused strategy, we are pleased with the
results and poised to capture the opportunities ahead as we seek to
maximize value for our shareholders.”
Recent Business Highlights
- Strengthening Leadership Position in OA Pain
Management
- Extended exclusive distribution agreement with our established
Canadian commercial partner, Pendopharm, to sell Cingal®, Monovisc®
and Orthovisc® through 2030, building on the existing market
leadership position in Canada.
- Continued engagement with FDA on proposed non-clinical next
steps regarding Cingal U.S. regulatory approval following a Type C
meeting with the FDA in early 2023 and the Company’s success in
meeting its latest Phase III Pivotal primary endpoint in the fall
of 2022.
- Advancing a Highly Differentiated Portfolio of HA-Based
Regenerative Solutions
- Completed over 200 cases with 40+ surgeons using the Integrity™
Implant System, Anika’s HA-based regenerative rotator cuff patch
system, during limited market release; on-track for full market
release in mid-2024.
- Launched X-Twist™ Biocomposite in
Sports Medicine and Achieved Sales Milestone
- X-Twist Fixation System with more than 10,000 anchors sold
globally since full launch in early 2023; Biocomposite full market
release began in May 2024; together with the PEEK version,
addresses the more than $600 million U.S. rotator cuff
market2.
- Accelerated Pivot to Profitability Underway
- As part of our refocused strategy, completed cost reductions in
the first quarter of 2024 to realize $10 million in annualized cost
savings; recorded $0.8 million of severance costs.
2 SmartTRAK Q3-2023 data
Fiscal 2024 GuidanceIn 2024, Anika is
prioritizing accelerated growth in profitability, with a focus on
the products with the greatest growth opportunities and where the
Company has the most differentiated right-to-win.
As such, Anika expects revenue for fiscal year 2024 of $168 to
$173 million, representing growth of 1% to 4% compared to 2023.
Revenue ranges by product family are:
- OA Pain Management of $102 to $104 million, up 0% to 2%, on
sustained above-market growth offset by some unfavorable order
timing
- Joint Preservation and Restoration of $58 to $60.5 million, up
6% to 10%
- Non-Orthopedic of $8 to $8.5 million, down 14% to 19%
The Company expects adjusted EBITDA for 2024 to be $25 to $30
million, up over 75% at the midpoint, representing an adjusted
EBITDA margin of at least 15%, up over 600 basis points compared to
2023. Anika’s expectations around improved profitability in 2024
reflect only partial-year cost savings as well as the early-stage
ramp from Anika’s new products.
Conference Call and Webcast InformationAnika’s
management will hold a conference call and webcast to discuss its
financial results and business highlights today, Wednesday, May 8,
2024, at 5:30 pm ET. The conference call can be accessed by dialing
1-888-886-7786 (toll-free domestic) or 1-416-764-8658
(international) and providing the conference ID number 1665626. A
live audio webcast will be available in the Investor Relations
section of Anika’s website, www.anika.com. A slide presentation
with highlights from the conference call will be available in the
Investor Relations section of the Anika website. A replay of the
webcast will be available on Anika’s website approximately two
hours after the completion of the event.
About AnikaAnika Therapeutics, Inc. (NASDAQ:
ANIK), is a global joint preservation company that creates and
delivers meaningful advancements in early intervention orthopedic
care. Leveraging our core expertise in hyaluronic acid and implant
solutions, we partner with clinicians to provide minimally invasive
products that restore active living for people around the world.
Our focus is on high opportunity spaces within orthopedics,
including Osteoarthritis Pain Management, Regenerative Solutions,
Sports Medicine and Arthrosurface Joint Solutions, and our products
are efficiently delivered in key sites of care, including
ambulatory surgery centers. Anika’s global operations are
headquartered outside of Boston, Massachusetts. For more
information about Anika, please visit www.anika.com.
ANIKA, ANIKA THERAPEUTICS, CINGAL, INTEGRITY, MONOVISC,
ORTHOVISC, X-TWIST, and the Anika logo are trademarks of Anika
Therapeutics, Inc. or its subsidiaries or are licensed to Anika
Therapeutics, Inc. for its use.
Non-GAAP Financial InformationNon-GAAP
financial measures should be considered supplemental to, and not a
substitute for, the Company’s reported financial results prepared
in accordance with GAAP. Furthermore, the Company’s definition of
non-GAAP measures may differ from similarly titled measures used by
others. Because non-GAAP financial measures exclude the effect of
items that will increase or decrease the Company’s reported results
of operations, Anika strongly encourages investors to review the
Company’s consolidated financial statements and publicly filed
reports in their entirety. The Company presents these non-GAAP
financial measures because it uses them as supplemental measures in
internally assessing the Company’s operating performance, and, in
the case of Adjusted EBITDA, it is set as a key performance metric
to determine executive compensation. The Company also recognizes
that these non-GAAP measures are commonly used in determining
business performance more broadly and believes that they are
helpful to investors, securities analysts, and other interested
parties as a measure of comparative operating performance from
period to period.
Adjusted Gross MarginAdjusted gross margin is defined by the
Company as adjusted gross profit divided by total revenue. The
Company defines adjusted gross profit as GAAP gross profit
excluding amortization of certain acquired assets and non-cash
product rationalization charges.
Adjusted EBITDA Adjusted EBITDA is defined by the Company as
GAAP net income (loss) excluding depreciation and amortization,
interest and other income (expense), income taxes, stock-based
compensation expense, acquisition related expenses, non-cash
charges related to goodwill impairment, non-cash product
rationalization charges, severance costs and shareholder activism
costs.
Adjusted Net Income (Loss) and Adjusted EPS Adjusted net income
(loss) is defined by the Company as GAAP net income excluding
acquisition related expenses, inclusive of the impact of purchase
accounting, on a tax effected basis, non-cash charges related to
goodwill impairment, non-cash product rationalization charges,
stock-based compensation and charges related to discontinuation of
a software project. Adjusted diluted EPS is defined by the Company
as GAAP diluted EPS excluding acquisition related expenses and the
impact of purchase accounting, each on a tax-adjusted per share
basis, non-cash product rationalization charges, stock-based
compensation, severance costs and shareholder activism costs.
Beginning in the first quarter of 2024, adjusted net income (loss)
and adjusted EPS were revised to exclude stock-based compensation,
net of tax, and this revised calculation is reflected for all
periods presented.
A reconciliation of adjusted gross profit to gross profit (and
the associated adjusted gross margin calculation), adjusted EBITDA
to net income (loss), adjusted net income (loss) to net income
(loss) and adjusted diluted EPS to diluted EPS, the most directly
comparable financial measures calculated and presented in
accordance with GAAP, is shown in the tables at the end of this
release.
Forward-Looking Statements This press release
may contain forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, concerning
the Company's expectations, anticipations, intentions, beliefs or
strategies regarding the future which are not statements of
historical fact, including statements in the sub-headings and Dr.
Blanchard’s quote about achieving future revenue and adjusted
EBITDA guidance, statements in the section titled Recent Business
Highlights about future product launches and potential cost
savings, and in the section titled Fiscal 2024 Guidance. These
statements are based upon the current beliefs and expectations of
the Company's management and are subject to significant risks,
uncertainties, and other factors. The Company's actual results
could differ materially from any anticipated future results,
performance, or achievements described in the forward-looking
statements as a result of a number of factors including, but not
limited to, (i) the Company's ability to successfully commence
and/or complete clinical trials of its products on a timely basis
or at all; (ii) the Company's ability to obtain pre-clinical or
clinical data to support domestic and international pre-market
approval applications, 510(k) applications, or new drug
applications, or to timely file and receive FDA or other regulatory
approvals or clearances of its products; (iii) that such approvals
will not be obtained in a timely manner or without the need for
additional clinical trials, other testing or regulatory
submissions, as applicable; (iv) the Company's research and product
development efforts and their relative success, including whether
we have any meaningful sales of any new products resulting from
such efforts; (v) the cost effectiveness and efficiency of the
Company's clinical studies, manufacturing operations, and
production planning; (vi) the strength of the economies in which
the Company operates or will be operating, as well as the political
stability of any of those geographic areas; (vii) future
determinations by the Company to allocate resources to products and
in directions not presently contemplated; (viii) the Company's
ability to successfully commercialize its products, in
the U.S. and abroad; (ix) the Company's ability to
provide an adequate and timely supply of its products to its
customers; and (x) the Company's ability to achieve its growth
targets. Additional factors and risks are described in the
Company's periodic reports filed with the Securities and
Exchange Commission, and they are available on
the SEC's website at www.sec.gov.
Forward-looking statements are made based on information available
to the Company on the date of this press release, and the Company
assumes no obligation to update the information contained in this
press release.
For Investor Inquiries:Anika Therapeutics,
Inc.Mark Namaroff, 781-457-9287Vice President, Investor Relations,
ESG and Corporate Communicationsinvestorrelations@anika.com
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Consolidated
Statements of Operations |
(in
thousands, except per share data) |
(unaudited) |
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
|
2024 |
|
2023 |
Revenue |
|
$ |
40,523 |
|
|
$ |
37,924 |
|
Cost of Revenue |
|
|
15,895 |
|
|
|
15,081 |
|
Gross Profit |
|
|
24,628 |
|
|
|
22,843 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Research and development |
|
|
8,164 |
|
|
|
8,400 |
|
Selling, general and administrative |
|
|
21,527 |
|
|
|
26,996 |
|
Total operating expenses |
|
|
29,691 |
|
|
|
35,396 |
|
Loss from operations |
|
|
(5,063 |
) |
|
|
(12,553 |
) |
Interest and other income (expense), net |
|
|
592 |
|
|
|
539 |
|
Loss before income taxes |
|
|
(4,471 |
) |
|
|
(12,014 |
) |
Provision for (benefit from) income taxes |
|
|
43 |
|
|
|
(1,664 |
) |
Net loss |
|
$ |
(4,514 |
) |
|
$ |
(10,350 |
) |
|
|
|
|
|
Net loss per share: |
|
|
|
|
Basic |
|
$ |
(0.31 |
) |
|
$ |
(0.71 |
) |
Diluted |
|
$ |
(0.31 |
) |
|
$ |
(0.71 |
) |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
|
|
14,698 |
|
|
|
14,653 |
|
Diluted |
|
|
14,698 |
|
|
|
14,653 |
|
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Consolidated
Balance Sheets |
(in
thousands, except per share data) |
(unaudited) |
|
|
|
|
|
March
31, |
|
December
31, |
ASSETS |
2024 |
|
2023 |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
68,629 |
|
|
$ |
72,867 |
|
Accounts receivable, net |
|
32,077 |
|
|
|
35,961 |
|
Inventories, net |
|
49,408 |
|
|
|
46,386 |
|
Prepaid expenses and other current assets |
|
8,848 |
|
|
|
8,095 |
|
Total current assets |
|
158,962 |
|
|
|
163,309 |
|
Property and equipment,
net |
|
46,057 |
|
|
|
46,198 |
|
Right-of-use assets |
|
28,181 |
|
|
|
28,767 |
|
Other long-term assets |
|
17,571 |
|
|
|
18,672 |
|
Deferred tax assets |
|
1,273 |
|
|
|
1,489 |
|
Intangible assets, net |
|
4,297 |
|
|
|
4,626 |
|
Goodwill |
|
7,403 |
|
|
|
7,571 |
|
Total assets |
$ |
263,744 |
|
|
$ |
270,632 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
10,022 |
|
|
$ |
9,860 |
|
Accrued expenses and other current liabilities |
|
18,438 |
|
|
|
21,199 |
|
Total current liabilities |
|
28,460 |
|
|
|
31,059 |
|
Other long-term
liabilities |
|
404 |
|
|
|
404 |
|
Lease liabilities |
|
26,344 |
|
|
|
26,904 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.01 par value |
|
148 |
|
|
|
147 |
|
Additional paid-in-capital |
|
91,165 |
|
|
|
90,009 |
|
Accumulated other comprehensive loss |
|
(6,315 |
) |
|
|
(5,943 |
) |
Retained earnings |
|
123,538 |
|
|
|
128,052 |
|
Total stockholders’ equity |
|
208,536 |
|
|
|
212,265 |
|
Total liabilities and
stockholders’ equity |
$ |
263,744 |
|
|
$ |
270,632 |
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Gross Profit to Adjusted Gross
Profit |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
|
2024 |
|
2023 |
Gross Profit |
|
$ |
24,628 |
|
|
$ |
22,843 |
|
Product rationalization related charges |
|
|
472 |
|
|
|
- |
|
Acquisition related intangible asset amortization |
|
|
157 |
|
|
|
1,562 |
|
Adjusted Gross Profit |
|
$ |
25,257 |
|
|
$ |
24,405 |
|
|
|
|
|
|
Gross Margin |
|
|
61 |
% |
|
|
60 |
% |
Adjusted Gross Margin |
|
|
62 |
% |
|
|
64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Net Income to Adjusted
EBITDA |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
|
2024 |
|
2023 |
Net loss |
|
$ |
(4,514 |
) |
|
$ |
(10,350 |
) |
Interest and other (income) expense, net |
|
|
(592 |
) |
|
|
(539 |
) |
Provision for (benefit from) income taxes |
|
|
43 |
|
|
|
(1,664 |
) |
Depreciation and amortization |
|
|
1,866 |
|
|
|
1,764 |
|
Stock-based compensation |
|
|
3,590 |
|
|
|
3,717 |
|
Product rationalization |
|
|
472 |
|
|
|
- |
|
Arbitration settlement |
|
|
- |
|
|
|
3,250 |
|
Acquisition related intangible asset amortization |
|
|
197 |
|
|
|
1,787 |
|
Severance costs |
|
|
839 |
|
|
|
- |
|
Costs of shareholder activism |
|
|
601 |
|
|
|
831 |
|
Adjusted EBITDA |
|
$ |
2,502 |
|
|
$ |
(1,204 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Net Income to Adjusted Net
Income |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
|
2024 |
|
2023 |
Net loss |
|
$ |
(4,514 |
) |
|
$ |
(10,350 |
) |
Product rationalization, tax effected |
|
|
477 |
|
|
|
- |
|
Arbitration settlement, tax effected |
|
|
- |
|
|
|
2,776 |
|
Share-based compensation, tax effected |
|
|
3,624 |
|
|
|
3,175 |
|
Acquisition related intangible asset amortization, tax
effected |
|
|
199 |
|
|
|
1,526 |
|
Severance costs, tax effected |
|
|
847 |
|
|
|
- |
|
Costs of shareholder activism, tax effected |
|
|
607 |
|
|
|
710 |
|
Adjusted net income
(loss) |
|
$ |
1,240 |
|
|
$ |
(2,163 |
) |
|
|
|
|
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Diluted Earnings Per Share to
Adjusted Diluted Earnings Per Share |
(in
thousands, except per share data) |
(unaudited) |
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
|
2024 |
|
2023 |
Diluted net loss per
share |
|
$ |
(0.31 |
) |
|
$ |
(0.71 |
) |
Product rationalization, tax effected |
|
|
0.03 |
|
|
|
- |
|
Arbitration settlement, tax effected |
|
|
- |
|
|
|
0.19 |
|
Share-based compensation, tax effected |
|
|
0.25 |
|
|
|
0.22 |
|
Acquisition related intangible asset amortization, tax
effected |
|
|
0.02 |
|
|
|
0.11 |
|
Severance costs, tax effected |
|
|
0.06 |
|
|
|
- |
|
Costs of shareholder activism, tax effected |
|
|
0.04 |
|
|
|
0.05 |
|
Adjusted diluted net income
(loss) per share |
|
$ |
0.09 |
|
|
$ |
(0.14 |
) |
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Revenue by
Product Family |
(in
thousands, except percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
2024 |
|
2023 |
|
$ change |
|
% change |
OA Pain Management |
$ |
24,318 |
|
$ |
22,633 |
|
$ |
1,685 |
|
7 |
% |
Joint Preservation and
Restoration |
|
13,841 |
|
|
13,453 |
|
|
388 |
|
3 |
% |
Non-Orthopedic |
|
2,364 |
|
|
1,838 |
|
|
526 |
|
29 |
% |
Revenue |
$ |
40,523 |
|
$ |
37,924 |
|
$ |
2,599 |
|
7 |
% |
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