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,
2023.
First Quarter 2023 Financial Summary
- Revenue in the first quarter of 2023 was $37.9 million, up 3%
compared with $36.7 million in the first quarter of 2022.
- Osteoarthritis (OA) Pain Management1 revenue of $22.6 million,
up 8%
- Joint Preservation and Restoration revenue of $13.5 million, up
11%
- Non-Orthopedic1 revenue of $1.8 million, down 49%
- Gross margin was 60%, including $1.6 million of non-cash
acquisition-related expenses; Adjusted gross margin2 was 64%.
- Net loss was ($10.4) million, or ($0.71) per share, which
includes the Parcus Medical unitholder arbitration settlement, as
well as shareholder activism and other non-recurring corporate
costs, compared to net loss of ($2.9) million, or ($0.20) per
share, in the prior year period. Adjusted net loss2 was ($5.3)
million, or ($0.36) per share, compared to adjusted net loss2 of
($1.6) million, or ($0.11) per share, in the prior year
period.
- Adjusted EBITDA2 was ($1.2) million, compared to adjusted
EBITDA2 of $2.6 million in the first quarter of 2022.
- Operating cash outflow was $3.6 million; quarter ending cash
balance was $79.7 million with no outstanding debt.
1 Revenue from veterinary products historically reported in OA
Pain Management is now reported in the Non-Orthopedic product
family to provide investors a more accurate representation of the
performance of our business.2 See description of non-GAAP financial
information contained in this release.
“We are off to a positive start to 2023 with solid top line
performance in the first quarter,” said Cheryl R. Blanchard, Ph.D.,
Anika’s President and CEO. “Double digit growth in our Joint
Preservation and Restoration product family coupled with solid OA
Pain Management growth gives us confidence in our 2023 outlook. We
are driving adoption of our X-Twist Fixation System and are
on-track for the full market release of our new RevoMotion Reverse
Shoulder system in late 2023, as well as the launch of our
HA-based, arthroscopic, regenerative rotator cuff patch system in
2024. With our strong balance sheet and growing product portfolio,
we are creating meaningful value for our shareholders.”
Recent Business Highlights
- Leadership in OA Pain Management Market
- #1 U.S. market share position for 2022 in OA Pain Management
with single-injection Monovisc® and multi-injection
Orthovisc®.
- Building a Best-in-Class Portfolio of Joint
Preservation and Restoration Solutions
- Continued momentum following full market release of X-Twist™
Fixation System, Anika’s cornerstone suture anchor system, which is
uniquely positioned to address the needs of surgeons performing
high volume soft tissue repair procedures such as rotator cuff
repair and ankle stabilization surgeries.
- RevoMotion™ Reverse Shoulder Arthroplasty system receiving very
positive surgeon feedback during limited market release; remains on
track for full market release in late 2023 and will expand Anika’s
shoulder arthroplasty portfolio in the more than $800 million U.S.
reverse shoulder market.
- Tactoset®, Anika’s regenerative solution for insufficiency
fractures and hardware augmentation, received an additional 510(k)
clearance for use with autologous bone marrow aspirate (BMA), a key
component in regenerative healing.
- Advancing Cingal® Towards U.S. Regulatory
Approval
- Actively engaging with the FDA regarding next steps for U.S.
regulatory approval and exploring commercial partnerships in the
U.S. and select Asian markets.
- Other Recent Activities
- Entered into Settlement Agreement
with Parcus Medical unitholders subsequent to quarter end,
resolving arbitration regarding the 2020 Merger Agreement between
Anika and Parcus Medical.
- Entered into Cooperation Agreement
with activist investor, Caligan Partners, subsequent to quarter
end.
- Authorized a $20 million share
repurchase program subsequent to quarter end, with the first $10
million split between an accelerated stock repurchase program and
an open market program and the second $10 million through an open
market program subject to the Company generating positive cash
flow.
- Appointed Gary Fischetti as a new independent director to the
Board of Directors in April, bringing decades of relevant
experience in the medical device industry.
Fiscal 2023 Revenue Outlook The Company
continues to expect its overall revenue for fiscal year 2023 to be
between $158 million and $163 million, representing growth of 1% to
4% compared to 2022, as growth in OA Pain Management and Joint
Preservation and Restoration is offset by lower ancillary
Non-Orthopedic revenues*.
Revenue ranges by product family are:
- OA Pain Management of $93.5-$96 million, up 2% to 4%*
- Joint Preservation and Restoration of $55.5-$58 million, up 10%
to 15%
- Non-Orthopedic of approximately $9 million, down ~35%*
* Effective January 1, 2023, the Company began to report revenue
from product sales to veterinary customers within the
Non-Orthopedic product family whereas such revenue had been
previously reported within the OA Pain Management product family.
The Company’s growth outlook reflects this reclassification for
both 2023 and 2022.
Conference Call InformationAnika’s management
will hold a conference call and webcast to discuss its financial
results and business highlights today, Tuesday, May 9, 2023, at
5:00 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 53307083. 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, MONOVISC, ORTHOVISC,
REVOMOTION, TACTOSET, X-TWIST, and the Anika logo are registered
trademarks of Anika Therapeutics, Inc. or its subsidiaries.
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, the impact of
inventory fair-value step up associated with our recent
acquisitions 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 and changes in the fair
value of contingent consideration associated with the Company’s
recent acquisitions as a result of the COVID pandemic, and non-cash
product rationalization charges.
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, and the non-cash product
rationalization charges. In the context of adjusted net income
(loss), the impact of purchase accounting includes amortization of
inventory step up and intangible assets recorded as part of
purchase accounting for acquisition transactions. The amortized
assets contribute to revenue generation, and the amortization of
such assets will recur in future periods until such assets are
fully amortized. These assets include the estimated fair value of
certain identified assets acquired in acquisitions in 2020 and
beyond, including in-process research and development, developed
technology, customer relationships and acquired tradenames. As a
result of COVID, the Company is also specifically excluding the
impacts of goodwill impairment charges and changes in the fair
value of contingent consideration associated with the acquisition
transactions, each on a tax effected basis. 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, and non-cash product rationalization
charges. Again, the Company is also specifically excluding the
impacts of goodwill impairment charges and changes in the fair
value of contingent consideration associated with recent
acquisition transactions, each on a tax effected basis if
applicable.
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 the second and third sentences of Dr.
Blanchard’s quote, the bullets with respect to the RevoMotion full
market release and Cingal regulatory approval in the section titled
Recent Business Highlights, and the statements made in the section
titled Fiscal 2023 Revenue Outlook. 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, |
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
37,924 |
|
|
$ |
36,693 |
|
Cost of Revenue |
|
15,081 |
|
|
|
14,889 |
|
Gross Profit |
|
22,843 |
|
|
|
21,804 |
|
|
|
|
|
Operating expenses: |
|
|
|
Research and development |
|
8,400 |
|
|
|
6,157 |
|
Selling, general and administrative |
|
26,996 |
|
|
|
19,201 |
|
Total operating expenses |
|
35,396 |
|
|
|
25,358 |
|
Loss from operations |
|
(12,553 |
) |
|
|
(3,554 |
) |
Interest and other income (expense), net |
|
539 |
|
|
|
(154 |
) |
Loss before income taxes |
|
(12,014 |
) |
|
|
(3,708 |
) |
Benefit from income taxes |
|
(1,664 |
) |
|
|
(775 |
) |
Net loss |
$ |
(10,350 |
) |
|
$ |
(2,933 |
) |
|
|
|
|
Net loss per share: |
|
|
|
Basic |
$ |
(0.71 |
) |
|
$ |
(0.20 |
) |
Diluted |
$ |
(0.71 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
Basic |
|
14,653 |
|
|
|
14,466 |
|
Diluted |
|
14,653 |
|
|
|
14,466 |
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Consolidated
Balance Sheets |
(in
thousands, except per share data) |
|
|
|
|
|
|
March
31, |
|
December
31, |
ASSETS |
|
2023 |
|
|
|
2022 |
|
Current assets: |
|
|
|
Cash, cash equivalents and investments |
$ |
79,737 |
|
|
$ |
86,327 |
|
Accounts receivable, net |
|
30,629 |
|
|
|
34,627 |
|
Inventories, net |
|
41,319 |
|
|
|
39,765 |
|
Prepaid expenses and other current assets |
|
8,646 |
|
|
|
8,828 |
|
Total current assets |
|
160,331 |
|
|
|
169,547 |
|
Property and equipment, net |
|
48,803 |
|
|
|
48,279 |
|
Right-of-use assets |
|
30,175 |
|
|
|
30,696 |
|
Other long-term assets |
|
18,131 |
|
|
|
17,219 |
|
Deferred tax assets |
|
1,519 |
|
|
|
1,449 |
|
Intangible assets, net |
|
72,653 |
|
|
|
74,599 |
|
Goodwill |
|
7,462 |
|
|
|
7,339 |
|
Total assets |
$ |
339,074 |
|
|
$ |
349,128 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
8,948 |
|
|
$ |
9,074 |
|
Accrued expenses and other current liabilities |
|
19,745 |
|
|
|
18,840 |
|
Total current liabilities |
|
28,693 |
|
|
|
27,914 |
|
Other long-term liabilities |
|
399 |
|
|
|
398 |
|
Deferred tax liability |
|
4,114 |
|
|
|
6,436 |
|
Lease liabilities |
|
28,280 |
|
|
|
28,817 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.01 par value |
|
147 |
|
|
|
146 |
|
Additional paid-in-capital |
|
83,243 |
|
|
|
81,141 |
|
Accumulated other comprehensive loss |
|
(6,171 |
) |
|
|
(6,443 |
) |
Retained earnings |
|
200,369 |
|
|
|
210,719 |
|
Total stockholders’ equity |
|
277,588 |
|
|
|
285,563 |
|
Total liabilities and stockholders’ equity |
$ |
339,074 |
|
|
$ |
349,128 |
|
Reconciliation of GAAP Gross Profit to Adjusted Gross
Profit |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Gross Profit |
$ |
22,843 |
|
|
$ |
21,804 |
|
Acquisition related intangible asset amortization |
|
1,562 |
|
|
|
1,562 |
|
Adjusted Gross Profit |
$ |
24,405 |
|
|
$ |
23,366 |
|
|
|
|
|
Unadjusted Gross Margin |
|
60 |
% |
|
|
59 |
% |
Adjusted Gross Margin |
|
64 |
% |
|
|
64 |
% |
|
|
|
|
Reconciliation of GAAP Net Income to Adjusted
EBITDA |
(in
thousands) |
(unaudited) |
|
For the
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(10,350 |
) |
|
$ |
(2,933 |
) |
Interest and other (income) expense, net |
|
(539 |
) |
|
|
154 |
|
Benefit from income taxes |
|
(1,664 |
) |
|
|
(775 |
) |
Depreciation and amortization |
|
1,764 |
|
|
|
1,830 |
|
Stock-based compensation |
|
3,717 |
|
|
|
2,545 |
|
Arbitration settlement |
|
3,250 |
|
|
|
- |
|
Acquisition related intangible asset amortization |
|
1,787 |
|
|
|
1,787 |
|
Costs of shareholder activism |
|
831 |
|
|
|
- |
|
Adjusted EBITDA |
$ |
(1,204 |
) |
|
$ |
2,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income to Adjusted Net
Income |
(in
thousands) |
(unaudited) |
|
For the
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(10,350 |
) |
|
$ |
(2,933 |
) |
Arbitration settlement, tax effected |
|
2,776 |
|
|
|
- |
|
Acquisition related intangible asset amortization, tax
effected |
|
1,526 |
|
|
|
1,345 |
|
Costs of shareholder activism, tax effected |
|
710 |
|
|
|
- |
|
Adjusted net loss |
$ |
(5,338 |
) |
|
$ |
(1,588 |
) |
|
|
|
|
|
|
|
|
Reconciliation of GAAP Diluted Earnings Per Share to
Adjusted Diluted Earnings Per Share |
(per share
data) |
(unaudited) |
|
For the
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Diluted loss per share |
$ |
(0.71 |
) |
|
$ |
(0.20 |
) |
Arbitration settlement, tax effected |
|
0.19 |
|
|
|
- |
|
Acquisition related intangible asset amortization, tax
effected |
|
0.11 |
|
|
|
0.09 |
|
Costs of shareholder activism, tax effected |
|
0.05 |
|
|
|
- |
|
Adjusted diluted loss per share |
$ |
(0.36 |
) |
|
$ |
(0.11 |
) |
Anika
Therapeutics, Inc. and Subsidiaries |
Revenue by
Product Family |
(in
thousands, except percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
$ change |
|
% change |
|
OA Pain Management |
$ |
22,633 |
|
|
$ |
20,964 |
|
|
$ |
1,669 |
|
|
8 |
% |
|
Joint Preservation and Restoration |
|
13,453 |
|
|
|
12,139 |
|
|
|
1,314 |
|
|
11 |
% |
|
Non-Orthopedic |
|
1,838 |
|
|
|
3,590 |
|
|
|
(1,752 |
) |
|
-49 |
% |
|
Revenue |
$ |
37,924 |
|
|
$ |
36,693 |
|
|
$ |
1,231 |
|
|
3 |
% |
|
Note: Effective January 1, 2023, the Company began to report
revenue from product sales to veterinary customers within the
Non-Orthopedic product family whereas such revenue had been
previously reported within the OA Pain Management product family.
Revenue from product sales to veterinary customers amounted to $0.5
million and $1.8 million for the three months ended March 31, 2023
and 2022, respectively, and is reflected within Non-Orthopedic for
all periods presented.
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