Highlights: Fourth quarter revenues increased 48% to $7.4 million 768 TranS1 procedures performed globally in the quarter Gross margin was 84.7% for the quarter GAAP loss per share was $0.22 for the quarter Non-GAAP loss per share was $0.20 for the quarter National Launch of the AxiaLIF 2L, Two Level Percutaneous Lumbar Fusion System
WILMINGTON, N.C., Feb. 23, 2009 (GLOBE NEWSWIRE) -- TranS1 Inc. (Nasdaq:TSON), a medical device company focused on designing, developing and marketing products that implement its proprietary minimally invasive surgical approach to treat degenerative disc disease, instability and adult degenerative deformity affecting the lower lumbar region of the spine, today announced its financial results for the fourth quarter and year ended December 31, 2008.
Revenues were $7.4 million in the fourth quarter of 2008, representing a 48% increase over revenues of $5.0 million in the fourth quarter of 2007. Gross margin was 84.7% in the fourth quarter, an increase from 83.3% in the fourth quarter of 2007.
Operating expenses were $11.1 million in the fourth quarter of 2008 compared to $7.3 million in the fourth quarter of 2007. The increase in operating expenses is primarily attributable to an increase in sales and marketing costs as a result of the continued expansion of the direct sales force, increased commissions as a result of increased sales and increased surgeon training costs.
Net loss was $4.5 million and $2.2 million for the quarters ended December 31, 2008 and 2007, respectively. GAAP net loss per common share was $0.22 in the fourth quarter of 2008 compared to a net loss per share of $0.14 in the fourth quarter of 2007.
For the quarter ended December 31, 2008, on a non-GAAP basis, adjusting for non-cash stock compensation expense, net loss was $0.20 per common share based upon 20,534,000 weighted average common shares outstanding. For the quarter ended December 31, 2007, on a non-GAAP basis, adjusting for non-cash stock compensation expense, the issuance of 6.3 million shares of common stock from the company's initial public offering in October 2007 and the conversion of preferred stock into common stock in connection with the public offering, net loss was $0.07 per common share based upon 19,801,000 weighted average common shares outstanding.
Cash, cash-equivalents and investments were $77.3 million as of December 31, 2008.
"I was pleased with our strong financial results in the fourth quarter," said Rick Randall, President and Chief Executive Officer of TranS1. "The continuing maturation of our direct sales force combined with the impact of unique events like the Association of Pre-Sacral Spine Surgeons that we sponsored in October, significantly impacted our selling efforts. Additionally, since the national launch of the two-level device at NASS we have continued to build upon our early commercial success and surgeon adoption."
Conference Call
TranS1 will host a conference call today at 4:15 pm EST to discuss its fourth quarter financial results. To listen to the conference call on your telephone, please dial 877-718-5111 for domestic callers and 719-325-4809 for international callers approximately ten minutes prior to the start time. The call will be concurrently webcast. To access the live audio broadcast or the subsequent archived recording, visit the TranS1 Web site at www.trans1.com under the investor relations section.
Non-GAAP Measures
Management uses certain non-GAAP financial measures such as non-GAAP net loss and net loss per share, which exclude stock based compensation and include the assumed conversion of preferred stock to common stock. This non-GAAP presentation is given in part to enhance the understanding of the company's historical financial performance and comparability between periods. The company believes that the non-GAAP presentation to exclude stock-based compensation and the assumed conversion of preferred stock to common stock is relevant and useful information that will be widely used by investors and analysts. Accordingly, the company is disclosing this information to permit additional analysis of the company's performance. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP. A reconciliation of the GAAP financial measures to the comparable non-GAAP financial measure is included below.
About TranS1 Inc.
TranS1 is a medical device company focused on designing, developing and marketing products that implement its proprietary minimally invasive surgical approach to treat degenerative disc disease and instability affecting the lower lumbar region of the spine. TranS1 currently markets two single-level fusion products, the AxiaLIF(r) and the AxiaLIF 360(tm), and a two-level fusion product, the AxiaLIF 2L(tm), in the U.S. and Europe. TranS1 was founded in May 2000 and is headquartered in Wilmington, North Carolina. For more information, visit www.trans1.com.
Forward-Looking Statements
This press release includes forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. These risks and uncertainties include, among other things, risks associated with the adoption of a new technology by spine surgeons, product development efforts, regulatory requirements, maintenance and prosecution of adequate intellectual property protection and other economic and competitive factors. These forward-looking statements are based on the company's expectations as of the date of this press release and the company undertakes no obligation to update information provided in this press release. For a discussion of risks and uncertainties associated with TranS1's business, please review the company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2007.
TranS1 Inc.
Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31,
------------------- --------------------
2008 2007 2008 2007
-------- -------- --------- --------
Revenue $ 7,354 $ 4,960 $ 25,304 $ 16,473
Cost of revenue 1,128 829 4,315 3,042
-------- -------- --------- --------
Gross profit 6,226 4,131 20,989 13,431
-------- -------- --------- --------
Operating expenses:
Research and development 1,080 1,187 5,020 4,785
Sales and marketing 8,696 5,090 29,375 15,706
General and administrative 1,313 1,005 6,177 2,901
-------- -------- --------- --------
Total operating expenses 11,089 7,282 40,572 23,392
-------- -------- --------- --------
Operating loss (4,863) (3,151) (19,583) (9,961)
Interest income 330 916 2,548 1,384
Other income(expense) -- -- -- --
-------- -------- --------- --------
Net loss $ (4,533) $ (2,235) $ (17,035) $ (8,577)
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Net loss per common share
- basic and diluted $ (0.22) $ (0.14) $ (0.84) $ (1.46)
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Weighted average common
shares outstanding -
basic and diluted 20,534 15,893 20,289 5,872
======== ======== ========= ========
Stock-based compensation
is included in operating
expenses in the following
categories:
Cost of revenue $ 21 $ 14 $ 66 $ 53
Research and development 18 181 412 559
Sales and marketing 154 440 1,474 1,557
General and administrative 189 226 1,027 467
-------- -------- --------- --------
$ 382 $ 861 $ 2,979 $ 2,636
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Reconciliation of Fourth Quarter Results
(in thousands, except per share amounts)
(Unaudited) 2008 2007
--------- --------
GAAP net loss $ (4,533) $ (2,235)
Stock based compensation 382 861
--------- --------
Non-GAAP net loss $ (4,151) $ (1,374)
========= ========
Shares used in computing GAAP loss per share 20,534 15,893
Assumed issuance of common shares from
initial public offering -- 1,444
Assumed conversion of preferred stock to
common stock -- 2,464
--------- --------
Shares used in computing non-GAAP loss per
share 20,534 19,801
========= ========
Non-GAAP loss per share $ (0.20) $ (0.07)
========= ========
Reconciliation of Year-To-Date Results
(in thousands, except per share amounts)
(Unaudited) 2008 2007
--------- --------
GAAP net loss $ (17,035) $ (8,577)
Stock based compensation 2,979 2,636
--------- --------
Non-GAAP net loss $ (14,056) $ (5,941)
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Shares used in computing GAAP loss per share 20,289 5,872
Assumed issuance of common shares from
initial public offering -- 5,095
Assumed conversion of preferred stock to
common stock -- 8,694
--------- --------
Shares used in computing non-GAAP loss per
share 20,289 19,661
========= ========
Non-GAAP loss per share $ (0.69) $ (0.30)
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TranS1 Inc.
Balance Sheets
(in thousands)
December 31, December 31,
2008 2007
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 42,051 $ 64,676
Short-term investments 21,061 29,245
Accounts receivable, net 4,812 3,225
Inventory 6,369 4,025
Prepaid expenses and other assets 632 597
--------- ---------
Total current assets 74,925 101,768
Property and equipment, net 1,412 1,088
Long-term investments 14,154 --
--------- ---------
Total assets $ 90,491 $ 102,856
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,896 $ 1,631
Accrued expenses 2,009 1,786
--------- ---------
Total current liabilities 4,905 3,417
--------- ---------
Stockholders' equity
Common stock 2 2
Additional paid-in capital 133,507 130,325
Accumulated deficit (47,923) (30,888)
--------- ---------
Total stockholders' equity 85,586 99,439
--------- ---------
Total liabilities and stockholders'
equity $ 90,491 $ 102,856
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TranS1 Inc.
Statements of Cash Flows
(in thousands)
Twelve Months Ended
Dec. 31,
---------------------
2008 2007
--------- ---------
Cash flows from operating activities:
Net loss $ (17,035) $ (8,577)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation 804 540
Stock-based compensation 2,979 2,636
Allowance for excess and obsolete inventory 400 306
Provision for bad debts 101 95
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (1,688) (1,700)
(Increase) decrease in inventory (2,744) (2,251)
(Increase) decrease in prepaid expenses (35) (367)
Increase (decrease) in accounts payable 1,265 788
Increase (decrease) in accrued expenses 223 1,185
--------- ---------
Net cash used in operating activities (15,730) (7,345)
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (1,128) (516)
Purchases of short-term investments (41,607) (30,687)
Sales and maturities of short-term
investments 49,791 11,370
Purchases of long-term investments (14,154) --
--------- ---------
Net cash provided by (used in) investing
activities (7,098) (19,833)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 203 86,820
--------- ---------
Net cash provided by (used in) financing
activities 203 86,820
--------- ---------
Net increase (decrease) in cash and cash
equivalents (22,625) 59,642
Cash and cash equivalents, beginning of
period 64,676 5,034
--------- ---------
Cash and cash equivalents, end of period $ 42,051 $ 64,676
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