NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
CARLSBAD, Calif., May 30, 2019 (GLOBE NEWSWIRE) -- Aurora Spine Corporation (“Aurora Spine” or the “Company”) (TSXV: ASG) announces financial results for the three months ended March 31, 2019.
To our Shareholders:
Q1 2019 was a strong quarter for the Company based on several financial metrics and reflects significant research and development efforts.
- Increased Revenue – During the quarter, we generated $2.73 million in revenue, the highest quarter revenue in the Company’s history. The changes represent an increase of $1.23 million or 82% as compared to the same period in 2018.
- Gross Profit Rises - Gross profit was more than $1.16 million up over $287k over the comparable quarter last year.
- Positive Cash Flow in Q1 2019 - Cash Flow as measured by EBITDAC was $86k for the quarter. This is an increase of over $13k from the comparable quarter last year but Q1 2019 EBITDAC benefits from the IFRS mandated change in accounting for leases. The former rent expense now comprises a portion of amortization. The quarter also saw larger amounts spent on product development for new products and sales expenditures to help meet both our long and short term revenue goals. We expect EBITDAC to improve next quarter. EBITDAC is a non GAAP, non IFRS measure defined as Earnings before interest, taxes, depreciation, amortization and stock based compensation, adjusted by the loss on sale of property and equipment.
- Expandable Interspinous Device Patent Issued - On January 23, 2019, the Company announced the issuance by the United States Patent and Trademark Office (USPTO) of United States Patent No. 10,143,501 entitled “Expandable Interspinous Device”. This new patent relates to Aurora’s family of minimally invasive spinal implants, bolstering the patents already issued to Aurora for its ZIP® family and its minimally invasive spinal technologies.
- Product Development. The engineering team finalized product designs for the Posterior SI Joint fusion products and the ZIP-Flex interlaminar fixation device. These products are an important part of our longer term strategy through 2020.
During the three months ended March 31, 2019 we generated revenues in the amount of $2,729,221 compared to $1,503,297 during the same period the previous year, an increase of approximately $1.23 million or 82%. The primary drivers of this increase were:
| (i) | An approximately $379k increase in sales of cervical screws and cages and $827k increase in sales of lumbar screws and cages; and | |
| (ii) | A net increase of $20k overall of ZIP and various other products. |
During the three months ended March 31, 2019 cost of sales was $1,564,504 and gross profit was $1,164,717 as compared to $626,453 and $876,844 in the comparable period. Gross margin was 43% of revenues compared to 58%. Gross margin as a percentage of revenue decreased by 15% primarily as a result of a less favorable product sales mix (we generally earn significantly less margin on third party products) and increased external commissions paid to some of our key distributors.
Operating expenses (adjusted by a gain (loss) on sale of property and equipment) during the current quarter were $1,370,318 compared to $1,036,527 during the same period the previous year. Operating expenses increased by $334k or 32% as compared to the same period the previous year reflecting the Company’s increased sales and marketing, product engineering and research and development efforts on several new products during the quarter. These expenses reflected the Company’s drive for increased revenue growth and future products.
SELECTED BALANCE SHEET INFORMATION
The following table summarizes selected key financial data.
| As at | March 31, 2019 $ | December 31, 2018 $ | December 31, 2017 $ |
| Cash | 821,575 | 856,504 | 12,665 |
| Trade receivables | 1,718,399 | 1,584,269 | 811,491 |
| Prepaid expenses and deposits | 225,750 | 219,301 | 471,859 |
| Inventory | 2,619,364 | 2,562,957 | 2,462,509 |
| Current assets | 5,385,088 | 5,223,031 | 3,758,524 |
| Intangible assets | 849,875 | 853,529 | 264,247 |
| Property and equipment | 1,089,615 | 766,602 | 1,265,720 |
| Total assets | 7,324,578 | 6,843,162 | 5,288,491 |
| Current liabilities | 2,180,657 | 1,868,960 | 1,735,108 |
| Long-term liabilities | 2,406,189 | 2,016,000 | 1,902,000 |
| Common share equity | 20,661,153 | 20,661,153 | 19,706,040 |
SELECTED QUARTERLY INFORMATION
Operating results for each quarter for the last two fiscal years are presented in the table below.
| Quarters ended | March 31, 2019 $ | December 31, 2018 $ | September 30, 2018 $ | June 30, 2018 $ | March 31, 2018 $ | December 31, 2017 $ | September 30, 2017 $ | June 30, 2017 $ | ||||||||
| Revenue | 2,729,221 | 2,500,976 | 2,675,947 | 2,002,101 | 1,503,297 | 1,349,975 | 1,676,738 | 1,436,024 | ||||||||
| Cost of goods sold | (1,564,504 | ) | (1,266,038 | ) | (1,319,018 | ) | (877,746 | ) | (626,453 | ) | (1,017,320 | ) | (970,801 | ) | (709,060 | ) |
| Gross profit | 1,164,717 | 1,234,938 | 1,356,929 | 1,124,355 | 876,844 | 332,655 | 705,937 | 726,964 | ||||||||
| Operating expenses | 1,370,318 | * | 1,324,231 | * | 1,217,196 | * | 1,083,310 | * | 1,036,527 | * | 1,230,740 | * | 1,034,319 | 1,183,085 | ||
| EBITDAC** | 86,433 | 157,823 | 396,809 | 298,579 | 72,977 | (649,335 | ) | (100,022 | ) | (189,391 | ) | |||||
| Net income (loss) | (205,601 | ) | (89,293 | ) | 139,733 | 41,045 | (159,683 | ) | (898,085 | ) | (328,382 | ) | (456,121 | ) | ||
| Basic and diluted income (loss) per share | (0.00 | ) | (0.00 | ) | 0.00 | 0.00 | (0.00 | ) | (0.03 | ) | (0.01 | ) | (0.01 | ) | ||
* Adjusted by gains (losses) on sale of property and equipment.
** EBITDAC - a non GAAP, non IFRS measure defined as Earnings before Interest, Tax, Depreciation, Amortization and Stock based Compensation. Additionally, this amount is adjusted by gains (losses) on sale of property and equipment.
We are pleased that our efforts are beginning to create value for our shareholders. Management and I thank our shareholders for their continued support in these endeavors. We will look to extend our technology position further with minimally disruptive procedural solutions for the spine.
None of this would be possible without the dedication and commitment of our hardworking colleagues at Aurora. I want to thank them for the great accomplishments they have made this year, for Aurora and ultimately, for patients. They have embraced change and risen to the numerous challenges before them, and I am grateful for their ongoing support of our company and our mission.
I would also like to thank you, our investors, for your continued support. Together, we have built a strong foundation, and I look forward to the opportunities ahead of us. I am truly grateful to be part of an organization that makes such a positive improvement in the lives of patients around the world.
The statements together with the Management Discussion and Analysis can be found on SEDAR at www.sedar.com.
Trent J. Northcutt
President and Chief Executive Officer
About Aurora Spine
Aurora Spine is an early stage company focused on bringing new solutions to the spinal implant market through a series of screwless, innovative, minimally invasive, regenerative spinal implant technologies. Aurora Spine continues to position itself at the forefront of spinal surgery procedures, focusing on minimally invasive spine surgery technologies. Aurora Spine is changing spine surgery by focusing on disruptive technologies following the Company's commitment to - Simplifying the Complex.
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
For more information, please contact:
| Aurora Spine Corporation | ||
| Trent Northcutt President and Chief Executive Officer (760) 424-2004 www.aurora-spine.com | Sarina Mason Chief Financial Officer (760) 424-2004 | |