Fourth Quarter Highlights:
- Total revenue increased to $9.1 million from $8.3 million in Q4 2013, an increase of 10.0% over the prior year
- Gross profit increased to $5.8 million compared to $4.1 million in Q4 2013, an increase of 41.2% over the prior year
- Gross margins improved to 63.5%, an increase from 49.5% reported in the fourth quarter of 2013
- Loss from operations before impairment decreased to $1.6 million from $2.8 million in the prior year
BELGRADE, Mont., March 17, 2015 (GLOBE NEWSWIRE) -- Bacterin International Holdings, Inc. (NYSE MKT:BONE), a leader in the development of bone graft material, today reported financial results for the fourth quarter and full year ended December 31, 2014. The Company reported annual revenues of approximately $35.3 million and a net loss for the year of approximately $10.5 million, or ($1.76) per common share.
Revenue
Fourth quarter 2014 revenue was approximately $9.1 million, an increase of 10.0 % compared to approximately $8.3 million for the same period during 2013. Sequentially, fourth quarter 2014 revenue increased 7.4% over third quarter 2014 revenue of $8.5 million.
The reported fourth quarter 2014 revenue figure represents the fifth consecutive quarter of increased year-over-year revenue growth since Dan Goldberger joined Bacterin as Chief Executive Officer in August 2013.
"We have transitioned from a turn around project to a revenue growth story," said Mr. Goldberger. "New sales leadership joined the company in the second half of 2014 and we plan to continue increasing the number of sales assets representing Bacterin products in the field throughout 2015 in order to accelerate our future revenue growth."
Revenue for the full year 2014 was approximately $35.3 million, compared to approximately $33.1 million reported for full year 2013, representing an increase of 6.8% over the prior year.
Gross Profit
Gross profit for the fourth quarter of 2014 was $5.8 million or 63.5% of revenues, compared to $4.1 million or 49.5% of revenues for the fourth quarter of 2013.
For the year, gross profit was approximately $22.3 million, compared to $18.9 million in 2013. Gross margin for the year was 63.1%, which compares to a gross margin of 57.1% reported for 2013.
The increase in gross profit and gross margins are the result of an increased focus on operations which has yielded improved manufacturing efficiencies. Management expects Gross Margins for 2015 to be between 61.0% and 63.0%.
Sales and Marketing Expenses
Fourth quarter 2014 sales and marketing expenses increased to $4.5 million, as compared to $4.0 million during the same period in 2013. For the quarter, sales and marketing as a percentage of revenues increased to 49.8%, compared to 48.0% in the fourth quarter of 2013 due to increases in sales and marketing headcount between the two periods.
Full-year 2014 sales and marketing expenses increased to $16.9 million, as compared to $16.0 million for 2013. As a percentage of revenues, sales and marketing expenses decreased to 47.9% compared to 48.4% reported for the full year 2013.
General and Administrative Expenses
In the fourth quarter, general and administrative expenses decreased to $2.2 million as compared to $2.6 million reported for the same period last year. As a percentage of revenues, general and administrative expenses were 24.5% during the period as compared to 30.9% for the same period 2013.
Full year 2014 general and administrative expenses decreased to $8.9 million as compared to $10.2 million reported for the same period last year. As a percentage of revenues, general and administrative expenses were 25.2% as compared to 30.9% for 2013.
Loss from Operations before impairment
The fourth quarter 2014 loss from operations before impairment was approximately $1.6 million, compared to approximately $2.8 million in the fourth quarter of 2013.
Full-year 2014 loss from operations before impairment was approximately $5.4 million compared to a 2013 loss from operations before impairment of approximately $8.3 million.
Loss from Operations after impairment
During the fourth quarter of 2014, the Company made the strategic decision to discontinue its Cranial Maxillofacial Fixation (CMF) and coatings product lines since they are not integral to the Company's core strategy and represent an immaterial portion of the Company's current revenue stream. In connection with this decision, the Company reported a one-time, non-recurring impairment charge of approximately $913,000 during the fourth quarter of 2014. In the fourth quarter of 2013, the Company recorded an impairment charge of approximately $729,000 associated with the write off of goodwill from a previous acquisition.
The fourth quarter 2014 loss from operations after impairment was approximately $2.5 million compared to $3.6 million for the prior year.
For full-year 2014, the Company reported an operating loss after impairment of approximately $6.3 million, compared to $9.0 million for 2013.
Net Loss
The reported fourth quarter 2014 net loss was $3.3 million, a 20.7% decrease from the year-ago period operating loss of $4.2 million.
For the full-year 2014, the Company reported a net loss of $10.5 million compared to $12.7 million for 2013. Net loss per share for the full-year 2014 was $1.76 a share compared to a net loss per share of $2.80 for 2013.
EBITDA
The Company defines earnings before interest, taxes, depreciation and amortization ("EBITDA") as net income/loss from operations before depreciation, amortization, impairment charges and non-cash stock-based compensation. EBITDA for the fourth quarter of 2014 was a loss of $1.1 million compared to a loss of $1.6 million for the same period during 2013.
Full year 2014 EBITDA was a loss of $3.5 million compared to an EBITDA loss of $5.8 million in the prior year.
Financial Liquidity
Cash, cash equivalents and net accounts receivable were $8.9 million on December 31, 2014.
In addition, the Company entered into a common stock purchase agreement on March 16, 2015 with Aspire Capital Fund, LLC, a Chicago based investment fund. The agreement provides that once the Company receives additional listing approval from the NYSE MKT, Aspire Capital shall purchase $750,000 of unregistered common shares. The Company can, from time to time, elect to sell to Aspire Capital up to $10 million of common shares over a two-year period. The sale price of common shares purchased by Aspire Capital from the Company will be based upon the market price of our common stock at the time of each sale. The Company may not sell any additional shares to Aspire Capital until a registration statement related to the transaction has been declared effective by the U.S. Securities & Exchange Commission. No warrants were issued in connection with the transaction. Please refer to the Company's Current Report on Form 8-K filed concurrently with this press release for a copy of the agreements associated with this transaction. The Company believes the agreement with Aspire Capital provides flexibility in obtaining working capital under terms which are less dilutive to common shareholders compared to other available options at this time. The Company does not presently intend to sell additional shares to Aspire Capital. However, the Company will evaluate market conditions and may sell additional shares opportunistically to Aspire Capital following NYSE MKT approval and after a registration statement has been declared effective.
Full Year 2015 Guidance
Based on the planned growth of the Company's hybrid salesforce, combined with new product launches, the Company currently anticipates 2015 full-year revenue to be in the range of $40 million to $42 million compared to $35.3 million reported for 2014.
Conference date: March 18, 2015, 10:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: Bacterin's Fourth Quarter 2014 Results Call
Webcast Registration: Click Here
Following the live call, a replay will be available on the Company's website, www.bacterin.com, under "Investor Info."
About Bacterin International Holdings
Bacterin International Holdings, Inc. (NYSE MKT:BONE) develops, manufactures and markets biologics products to domestic and international markets. These products are used in a variety of applications including enhancing fusion in spine surgery, relief of back pain, promotion of bone growth in foot and ankle surgery, promotion of cranial healing following neurosurgery and subchondral repair in knee and other joint surgeries.
For further information, please visit www.bacterin.com.
Important Cautions Regarding Forward-looking Statements
This news release contains certain disclosures that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "continue," "efforts," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "strategy," "will," "goal," "target," "prospects," "potential," "optimistic," "confident," "likely," "probable" or similar expressions or the negative thereof. Statements of historical fact also may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: the Company's ability to meet its existing and anticipated contractual obligations, including financial covenant and other obligations contained in the Company's secured lending facility; the Company's ability to manage cash flow and achieve profitability; the Company's ability to remain listed on the NYSE MKT; the Company's ability to develop, market, sell and distribute desirable applications, products and services and to protect its intellectual property; the ability of the Company's sales force to achieve expected results; the ability of the Company's customers to pay and the timeliness of such payments; the Company's ability to obtain financing as and when needed; changes in consumer demands and preferences; the Company's ability to attract and retain management and employees with appropriate skills and expertise; the Company's ability to successfully conclude government investigations; the impact of changes in market, legal and regulatory conditions and in the applicable business environment, including actions of competitors; and other factors. Additional risk factors are listed in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading "Risk Factors." The Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.
| BACTERIN INTERNATIONAL HOLDINGS, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
|
As of December 31, 2014 |
As of December 31, 2013 |
|
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 4,468,208 | $ 3,046,340 |
| Trade accounts receivable, net of allowance for doubtful accounts of $1,392,989 and $1,309,859, respectively | 4,427,081 | 4,793,834 |
| Inventories, net | 9,558,648 | 10,753,600 |
| Prepaid and other current assets | 654,140 | 574,910 |
| Total current assets | 19,108,077 | 19,168,684 |
| Non-current inventories | 1,934,258 | 2,119,952 |
| Property and equipment, net | 4,654,527 | 5,180,556 |
| Intangible assets, net | 655,490 | 586,965 |
| Other assets | 1,598,539 | 1,821,471 |
| Total Assets | $ 27,950,891 | $ 28,877,628 |
| LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY | ||
| Current Liabilities: | ||
| Accounts payable | $ 3,876,760 | $ 2,767,639 |
| Accounts payable - related party | 250,629 | 647,844 |
| Accrued liabilities | 1,921,301 | 3,585,037 |
| Warrant derivative liability | 1,320,371 | 1,594,628 |
| Current portion of capital lease obligations | 61,970 | 171,926 |
| Current portion of royalty liability | 1,000,750 | 836,750 |
| Current portion of long-term debt | 50,671 | 47,727 |
| Total current liabilities | 8,482,452 | 9,651,551 |
| Long-term Liabilities: | ||
| Capital lease obligation, less current portion | 11,808 | 73,777 |
| Long term royalty liability, less current portion | 6,361,216 | 6,609,232 |
| Long-term debt, less current portion | 20,870,330 | 16,385,245 |
| Total Liabilities | 35,725,806 | 32,719,805 |
| Commitments and Contingencies | ||
| Stockholders' (Deficit) Equity | ||
| Preferred stock, $0.000001 par value; 5,000,000 shares authorized; no shares issued and Outstanding | -- | -- |
| Common stock, $0.000001 par value; 95,000,000 shares authorized; 6,679,646 shares issued and outstanding as of December 31, 2014 and 5,343,282 shares issued and outstanding as of December 31, 2013 | 7 | 5 |
| Additional paid-in capital | 63,091,620 | 56,516,491 |
| Accumulated deficit | (70,866,542) | (60,358,673) |
| Total Stockholders' Deficit | (7,774,915) | (3,842,177) |
| Total Liabilities & Stockholders' Deficit | $ 27,950,891 | $ 28,877,628 |
| See notes that are attached to the audited consolidated financial statements that are contained in the Company's 10K | ||
| BACTERIN INTERNATIONAL HOLDINGS, INC. | ||||||||
| Consolidated Statements of Operations | ||||||||
| For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||
| 2014 | 2013 | 2014 | 2013 | |||||
| Amount |
% of Revenue |
Amount |
% of Revenue |
Amount |
% of Revenue |
Amount |
% of Revenue |
|
| Revenue | ||||||||
| Tissue sales | $ 8,856,574 | 97.5% | $ 8,133,775 | 98.5% | $ 34,569,160 | 97.8% | $ 32,563,933 | 98.5% |
| Royalties and other | 224,831 | 2.5% | 124,001 | 1.5% | 762,652 | 2.2% | 509,481 | 1.5% |
| Total Revenue | 9,081,406 | 100.0% | 8,257,776 | 100.0% | 35,331,812 | 100.0% | 33,073,414 | 100.0% |
| Cost of sales | 3,315,362 | 36.5% | 4,174,032 | 50.5% | 13,034,314 | 36.9% | 14,185,719 | 42.9% |
| Gross Profit | 5,766,044 | 63.5% | 4,083,744 | 49.5% | 22,297,498 | 63.1% | 18,887,695 | 57.1% |
| Operating Expenses | ||||||||
| General and administrative | 2,221,990 | 24.5% | 2,551,700 | 30.9% | 8,886,972 | 25.2% | 10,204,659 | 30.9% |
| Sales and marketing | 4,525,407 | 49.8% | 3,959,840 | 48.0% | 16,912,865 | 47.9% | 16,017,229 | 48.4% |
| Research and development | 487,907 | 5.4% | 347,623 | 4.2% | 1,443,018 | 4.1% | 572,361 | 1.7% |
| Depreciation and amortization | 55,404 | 0.6% | 72,753 | 0.9% | 271,748 | 0.8% | 377,524 | 1.1% |
| Non-cash consulting expense | 53,150 | 0.6% | (17,041) | -0.2% | 135,075 | 0.4% | (5,117) | 0.0% |
| Total Operating Expenses | 7,343,859 | 80.9% | 6,914,875 | 83.7% | 27,649,678 | 78.3% | 27,166,656 | 82.1% |
| Loss from Operations before Impairment | (1,577,815) | -17.4% | (2,831,132) | -34.3% | (5,352,180) | -15.1% | (8,278,961) | -25.0% |
| Impairment of Assets | 912,549 | 10.0% | 728,618 | 8.8% | 912,549 | 2.6% | 728,618 | 2.2% |
| Loss from Operations | (2,490,364) | -27.4% | (3,559,750) | -43.1% | (6,264,729) | -17.7% | (9,007,579) | -27.2% |
| Other Income (Expense) | ||||||||
| Interest expense | (1,444,248) | -15.9% | (1,217,226) | -14.7% | (5,660,357) | -16.0% | (4,653,232) | -14.1% |
| Change in warrant derivative liability | 697,863 | 7.7% | 628,704 | 7.6% | 1,736,053 | 4.9% | 875,041 | 2.6% |
| Other income (expense) | (65,548) | -0.7% | (15,971) | -0.2% | (318,836) | -0.9% | 92,645 | 0.3% |
| Total Other Income (Expense) | (811,933) | -8.9% | (604,493) | -7.3% | (4,243,140) | -12.0% | (3,685,546) | -11.1% |
| Net Loss from Operations Before (Provision) Benefit for Income Taxes | (3,302,297) | -36.4% | (4,164,243) | -50.4% | (10,507,869) | -29.7% | (12,693,125) | -38.4% |
| Benefit (Provision) for Income Taxes | ||||||||
| Current | -- | 0.0% | -- | 0.0% | -- | 0.0% | -- | 0.0% |
| Deferred | -- | 0.0% | -- | 0.0% | -- | 0.0% | -- | 0.0% |
| Net Loss | $ (3,302,297) | -36.4% | $ (4,164,243) | -50.4% | $ (10,507,869) | -29.7% | $ (12,693,125) | -38.4% |
| Net loss per share: | ||||||||
| Basic | ($0.49) | ($0.83) | ($1.76) | ($2.80) | ||||
| Dilutive | ($0.49) | ($0.83) | ($1.76) | ($2.80) | ||||
| Shares used in the computation: | ||||||||
| Basic | 6,677,146 | 5,016,381 | 5,954,195 | 4,530,072 | ||||
| Dilutive | 6,677,146 | 5,016,381 | 5,954,195 | 4,530,072 | ||||
| See notes that are attached to the audited consolidated financial statements that are contained in the Company's 10K | ||||||||
| BACTERIN INTERNATIONAL HOLDINGS, INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| Year Ended December 31, | ||
| 2014 | 2013 | |
| Operating activities: | ||
| Net loss | $ (10,507,869) | $ (12,693,125) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||
| Depreciation and amortization | 952,320 | 753,522 |
| Non-cash interest | 814,374 | 633,398 |
| Impairment of Assets | 912,549 | 728,618 |
| Loss (Gain) on sale of fixed assets | 25,269 | (500) |
| Amortization of debt discount | 1,632,245 | 1,251,125 |
| Non-cash consulting expense/stock option expense | 935,316 | 838,847 |
| Provision for losses on accounts receivable and inventory | 647,765 | 2,320,955 |
| Gain in derivative warrant liability | (1,736,053) | (875,041) |
| Decrease of contingent liability | -- | (91,740) |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | 283,624 | 797,680 |
| Inventories | (17,392) | 747,691 |
| Prepaid and other assets | (455,048) | 263,352 |
| Accounts payable | 715,706 | (1,001,228) |
| Accrued liabilities | (1,526,865) | 1,434,140 |
| Net cash used in operating activities | (7,324,059) | (4,892,306) |
| Investing activities: | ||
| Purchases of property and equipment and intangible assets | (299,978) | (623,045) |
| Proceeds from sale of fixed assets | 1,626 | (70,255) |
| Net cash used in investing activities | (298,352) | (693,300) |
| Financing activities: | ||
| Proceeds from issuance of debt | 4,000,000 | -- |
| Payments on long-term debt | (653,397) | (621,967) |
| Payments on capital leases | (171,957) | (149,729) |
| Proceeds from exercise of options | -- | 27,575 |
| Net proceeds from issuance of stock | 5,869,633 | 4,450,001 |
| Net cash provided by financing activities | 9,044,279 | 3,705,880 |
| Net change in cash and cash equivalents | 1,421,868 | (1,879,726) |
| Cash and cash equivalents at beginning of period | 3,046,340 | 4,926,066 |
| Cash and cash equivalents at end of period | $ 4,468,208 | $ 3,046,340 |
| See notes that are attached to the audited consolidated financial statements that are contained in the Company's 10K | ||
| BACTERIN INTERNATIONAL HOLDINGS, INC. | |||||
| Calculation of (EBITDA) before Asset Impairment | |||||
|
For the three months ended December 31, |
For the year ended December 31, |
||||
| 2014 | 2013 | 2014 | 2013 | ||
| Loss from Operations before Impairment | (1,577,815) | (2,831,132) | (5,352,180) | (8,278,961) | |
| Non-Cash Compensation | (16,657) | 372,846 | 935,316 | 975,904 | |
| Depreciation & Amortization | 453,976 | 895,371 | 952,320 | 1,482,142 | |
| EBIDTA before Impairment | (1,140,496) | (1,562,914) | (3,464,544) | (5,820,915) | |