Aurora Spine Corporation (“Aurora Spine” or the “Company”) (TSXV:
ASG) (OTCQB: ASAPF), a designer and manufacturer of innovative
medical devices that improve spinal surgery outcomes, today
announced the financial results for the third quarter ended
September 30, 2022. All figures are in U.S. dollars.
Q3 and
Recent Highlights
- Sales Growth –
Sales remained strong in Q3 growing at 26% over Q3 2021.
- Positive EBITDAC –
Second consecutive quarter of positive EDITDAC at $150,687 in Q3
and $96,285 in Q2 compared to ($153,972) in Q1 and ($171,247) in Q3
2021. EBITDAC is a non-GAAP financial measure (defined below).
- DEXA Sales – DEXA
sales increased to 10.5% of total sales for the quarter as compared
to 5.3% in Q2 2022. This was accomplished with new sales with no
reduction in the Discovery PEEK cervical cage.
- Award – Aurora
Spine received the 2022 Best New Spine Technology Award for its
DEXA bone density-matched spine implant innovation at the annual
North American Spine Society (NASS) meeting.
- FDA Clearance Zip
– Received new FDA indication clearance of Lumbar Spinal
Stenosis for its ZIP™ series of MIS implants.
- FDA Clearance
SiLO TFX – FDA 510K clearance for
the patented SiLO TFX MIS Sacroiliac Joint Fixation System.
Management Commentary
Mr. Trent Northcutt, President and Chief Executive Officer of
Aurora Spine, stated, “Third quarter results were a solid showing
considering the anticipated slowdown in procedures early in the
quarter stemming from extended vacation schedules in the medical
industry. We continue to make progress on the sales front and as we
prepare for 2023, we are in the midst of improving our sales staff
by seeking additions to our team. We want to bolster our sales
efforts as the company has several key new products that will act
as growth catalysts, including the recently FDA-cleared SiLO TFX,
which we believe has significant promise in an emerging, minimially
invasive procedure in the industry that is just starting to
evolve.”
Mr. Northcutt continued, “During the third quarter we worked
diligently on moving forward on our DEXA series. During the third
quarter, we prepared for the company’s presence at North American
Spine Society (NASS), a major annual industry conference. We
believe it was a very successful event for the company, as we had
in-hand both SiLO TFX and DEXA products to highlight and share with
the medical community. We came out of NASS with many new
relationships and are working on developing adoption of Aurora
products. Another highlight out of NASS was that the company
received the 2022 Best New Spine Technology Award for its DEXA bone
density-matched spine implant innovation, which added credibility
to the innovative products we develop at Aurora and has brought
further exposure to the DEXA technology platform.”
Mr. Northcutt concluded, “We are pleased with the progress we
are making at Aurora Spine. We have been able to obtain FDA
approvals on new products and are working diligently to bring them
to the marketplace. Our focus is now preparing for 2023 and
executing on our plan to grow revenues and commercialize the
products that received approval in 2022, especially SiLO TFX. We
have many positive accomplishments in 2022 and are in a very solid
position headed into 2023 and looking forward to another year of
strong growth.”
Mr. Chad Clouse, Chief Financial Officer of Aurora Spine, added,
“The third quarter results were again EBITDAC positive for the
quarter. We achieved this through improving our gross profit margin
due to strong product mix and were successful in lowering R&D
expenses now that certain projects have been completed. The
company’s capital structure remains solid and we continue to make
progress on lowering the accounts receivables through recent
collections. We expect to see a reduction in the receivables
balance moving forward.”
Financial Results
Total revenues for the third quarter of 2022 were $3.65 million
an increase of 26% when compared to $2.89 million in the same
quarter one year ago and compared to $4.07 million for the second
quarter of 2022. The improvement in revenues over 2021 were due to
more procedures incorporating Aurora products like the ZIP and SiLO
and the hospitals and surgery centers returning to more normal
operations post-pandemic and as more procedures using Aurora
products being done in surgery centers.
Gross margin on total revenues were 53.2% for the third quarter
of 2022, compared to 46.9% in Q3 of 2021 and compared to 52.6%
during the second quarter of 2022. The year-over-year improvement
in gross margins is attributable to the company’s strategy of
selling more proprietary, Aurora Spine products. As the company
continues to focus on growing sales of proprietary products, gross
margin has the capabilities for additional improvements, dependent
upon sales mix and shipping costs.
Total operating expenses were $2.058 million for the third
quarter of 2022, compared to $1.724 million in the third quarter of
2021, and compared to $2.368 million for the second quarter of
2022. Operating expenses increased from the third quarter one year
ago due to the addition of new key salespeople, as well as higher
marketing expenses, but was lower sequentially from the second
quarter of 2022 due to lower research and development costs.
EBITDAC (a non-GAAP figure non IFRS measure defined as Earnings
before Interest, Tax, Depreciation, Amortization and Stock based
compensation) was $0.16 million for the third quarter of 2022,
compared to $(0.17) million in the third quarter of 2021 and $0.10
million in the second quarter of 2022. EBITDAC improved
sequentially due to improved gross margin and a decrease in certain
operating expenses.
Net loss was $(0.116) million for the third quarter of 2022,
compared to a loss of $(0.160) million in the second quarter of
2022 and improved from the third quarter of 2021 of a loss of
$(0.368) million. Basic and diluted net (loss) income per share was
$(0.00) per share in the second quarter of 2022 and $(0.00) per
share for the second quarter of 2022 and $(0.01) per share in the
third quarter of 2021.
Full financial statements can be found on SEDAR at
(www.sedar.com).
SELECTED BALANCE SHEET INFORMATION
The following table summarizes selected key financial data.
As at |
September 30, 2022$USD |
June 30, 2022$USD |
December 31, 2021$USD |
Cash |
644,669 |
758,980 |
3,172,575 |
Trade receivables |
3,736,634 |
4,057,976 |
2,668,174 |
Prepaid expenses and deposits |
678,150 |
699,302 |
674,687 |
Inventory |
2,708,416 |
2,856,730 |
1,889,640 |
Current assets |
7,767,988 |
8,372,988 |
8,405,076 |
Intangible assets |
945,464 |
949,117 |
854,331 |
Property and equipment |
2,202,319 |
1,937,480 |
1,304,242 |
Total assets |
10,915,652 |
11,259,585 |
10,563,649 |
Current liabilities |
3,136,410 |
3,450,121 |
2,627,281 |
Long-term liabilities |
2,769,376 |
2,721,942 |
2,367,056 |
Share capital |
25,087,474 |
25,087,474 |
25,087,474 |
SELECTED QUARTERLY INFORMATION
The Company’s functional currency is the US
dollar (USD). The functional currency of the Company’s US
subsidiary Aurora is USD. Operating results for each quarter for
the last two fiscal years are presented in the table below.
Quarters ended |
September
30,
2022$ |
June 30, 2022$ |
March 31, 2022$ |
December 30, 2021$ |
September 30, 2021$ |
June 30, 2021$ |
March 31, 2021$ |
December 31, 2020$ |
Revenue |
3,648,680 |
|
4,067,166 |
|
3,551,964 |
|
2,964,980 |
|
2,892,540 |
|
2,425,397 |
|
2,261,890 |
|
2,437,228 |
|
Cost of goods sold |
(1,706,677 |
) |
(1,926,683 |
) |
(1,650,355 |
) |
(1,602,047 |
) |
(1,536,244 |
) |
(1,421,393 |
) |
(1,151,572 |
) |
(1,533,983 |
) |
Gross profit |
1,942,003 |
|
2,140,483 |
|
1,901,609 |
|
1,362,933 |
|
1,356,296 |
|
1,004,004 |
|
1,110,318 |
|
903,245 |
|
Operating expenses |
2,057,655 |
|
2,367,985 |
|
2,288,186 |
|
2,266,897 |
|
1,724,513 |
|
1,879,479 |
|
1,672,131 |
|
1,400,165 |
|
EBITDAC** |
150,687 |
|
96,285 |
|
(153,972 |
) |
(566,569 |
) |
(171,247 |
) |
(480,837 |
) |
(191,430 |
) |
185,104 |
|
Net income (loss) |
(115,652 |
) |
(159,667 |
) |
(386,577 |
) |
(903,964 |
) |
(368,217 |
) |
(700,405 |
) |
(386,743 |
) |
(42,181 |
) |
Basic and diluted income (loss) per share*** |
(0.00 |
) |
(0.00 |
) |
(0.01 |
) |
(0.01 |
) |
(0.01 |
) |
(0.01 |
) |
(0.01 |
) |
(0.00 |
) |
* Adjusted by gains and
(losses) on sale of equipment.** EBITDAC is a
non-GAAP, non IFRS measure defined as Earnings before Interest,
Tax, Depreciation, Amortization and Stock based compensation. This
amount includes Gains (losses) on sale of property and equipment
and Other income (expense).*** Outstanding options
and warrants have not been included in the calculation of the
diluted loss per share as they would have the effect of being
anti-dilutive.
Conference Call Details
Date and Time: Monday, November 21, 2022, at
11:00 a.m. ET/8:00am Pacific Time
Call-in Information: Interested parties can
access the conference call by dialing (844) 861-5497 or (412)
317-5794.
Webcast: Interested parties can access the
conference call via a live webcast, which is available via the
following link: https://app.webinar.net/Rx9E6Lbwn4k or in the
Investor Relations section of the Company's website at
https://www.aurora-spine.com/investors-v02.
Replay: A teleconference replay of the call
will be available until November 28, 2022, at (877) 344-7529 or
(412) 317-0088, replay access code 5080066. Additionally, a replay
of the webcast will be available in the Investor Relations section
of the Company's website at
https://www.aurora-spine.com/investors-v02 or at
https://app.webinar.net/Rx9E6Lbwn4k for 90 days.
About Aurora Spine
Aurora Spine is focused on bringing new solutions to the spinal
implant market through a series of innovative, minimally invasive,
regenerative spinal implant technologies. Additional information
can be accessed at www.aurora-spine.com or
www.aurorapaincare.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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.
Contact:
Aurora Spine Corporation
Trent Northcutt
President and Chief Executive Officer
(760) 424-2004
Chad Clouse
Chief Financial Officer
(760) 424-2004
www.aurora-spine.com
Adam Lowensteiner
LYTHAM PARTNERS, LLC
Phoenix | New York
Telephone: 646-829-9700
asapf@lythampartners.com
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