TriVascular Technologies, Inc. (NASDAQ:TRIV), manufacturer of the
Ovation® Abdominal Stent Graft platform, today reported financial
results for the third quarter ended September 30, 2015.
Recent Accomplishments:
- Third quarter revenue of $9.5 million, up 20.0% over the third
quarter of 2014 as reported, and 23.4% on a constant currency
basis
- Third quarter gross margin of 63.5%, an increase from 57.2% in
the third quarter of 2014
- 4-year Ovation Clinical data presented at the November VIVA
conference
- Interim LIFE Study data highlighting clinical & economic
benefits of Ovation platform also presented at VIVA conference
- Commercial roll-out of the Ovation iX™ platform initiated in
the fourth quarter of 2015
"We are pleased with our domestic and international performance
in the third quarter which demonstrates continued adoption of the
Ovation platform" said President and Chief Executive Officer, Chris
Chavez. "As announced on October 26, 2015, TriVascular and
Endologix, Inc. signed a definitive merger agreement to form a
combined company focused on providing physicians with innovative
new technologies for the treatment of patients with AAA. We look
forward to bringing together our combined expertise for the benefit
of our customers, patients, employees and stockholders. We believe,
following the closing of the merger currently expected to be in
early 2016, the combined capabilities and differentiated
technologies of both companies will allow us to more effectively
advance our goal to improve and expand EVAR safely for more
patients."
Third Quarter Financial Results
Revenue for the three months ended September 30, 2015 increased
20.0% to $9.5 million, from $7.9 million in the same period of the
prior year. Geographically, revenue in the United States was $6.5
million, an increase of 20.3% from the three months ended September
30, 2014. International revenue totaled $3.0 million, an increase
of 19.4% from the three months ended September 30, 2014. On a
constant currency basis international and worldwide revenue
increased 30.6% and 23.4%, respectively, in the quarter.
Gross margin for the third quarter of 2015 was 63.5%, up from
57.2% in the three months ended September 30, 2014. The increase in
gross margin was primarily due to spreading manufacturing overhead
costs over higher production volumes.
Operating expenses for the third quarter of 2015 were $17.4
million, an increase of 5% compared to the third quarter of 2014.
The increase in operating expenses was driven primarily by an
increase in selling, marketing and general and administrative
expenses.
Loss from operations for the third quarter of 2015 was $11.4
million, compared to $12.1 million for the third quarter of 2014.
Net loss for the third quarter of 2015 was $13.6 million, compared
to $13.9 million for the third quarter of 2014. Adjusted EBITDA, a
non-GAAP measure, was a loss of $10.1 million for the third quarter
of 2015 compared to $11.4 million in the third quarter of 2014.
Cash and cash equivalents and short term investments were $50.0
million as of September 30, 2015.
Use of Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures of
Adjusted EBITDA and of constant currency revenue growth percentage.
We evaluate our results of operations on an as reported and a
constant currency basis. The constant currency presentation, which
is a non-GAAP measure, excludes the impact of fluctuations in
foreign currency exchange rates. We believe presenting constant
currency information provides valuable supplemental information
regarding our results of operations, consistent with how we
evaluate our performance. We calculate constant currency
percentages by converting our prior-period local currency financial
results using the current period exchange rates and comparing these
adjusted amounts to our current period reported results. We define
EBITDA as net loss plus interest expense, income tax expense, and
depreciation and amortization. We define Adjusted EBITDA as EBITDA
plus stock-based compensation expense and the change in value of
our warrants. For a reconciliation of Adjusted EBITDA to the most
comparable GAAP financial measure of net loss, please refer to the
table appearing at the end of this press release. We present
Adjusted EBITDA because we believe it is a useful indicator of our
operating performance. Our management uses Adjusted EBITDA
principally as a measure of our operating performance, and believes
that Adjusted EBITDA is useful to our investors because it is
frequently used by securities analysts, investors and other
interested parties in their evaluation of the operating performance
of companies in industries similar to ours. Our management also
uses Adjusted EBITDA for planning purposes, including the
preparation of our annual operating budget and financial
projections. Adjusted EBITDA should not be considered in isolation
or as a substitute for a measure of our liquidity or operating
performance prepared in accordance with U.S. GAAP, and is not
indicative of net loss from operations as determined under GAAP.
Adjusted EBITDA and other non-GAAP financial measures have
limitations that should be considered before using these measures
to evaluate our liquidity or financial performance. Adjusted EBITDA
does not include certain expenses that may be necessary to review
our operating results and liquidity requirements. Our definition
and calculation of Adjusted EBITDA may differ from that of other
companies. In addition, to facilitate the explanation of the
earnings per share calculation for the three and nine month periods
ended September 30, 2015 and 2014, we are also providing a pro
forma calculation reflecting conversion of our convertible
preferred stock in connection with the closing of our initial
public offering in April 2014.
About TriVascular Technologies, Inc.
TriVascular is a medical device company developing and
commercializing innovative technologies to significantly advance
minimally invasive treatment of abdominal aortic aneurysms. The
company manufactures the Ovation Abdominal Stent Graft platform,
the lowest profile FDA-approved endovascular aortic repair (EVAR)
system, which utilizes a novel, polymer-based sealing mechanism.
TriVascular is based in Santa Rosa, California.
Forward-Looking Statements
In addition to the historical information, this communication
includes statements that may be forward-looking statements. The
words "believe," "expect," "anticipate," "project" and similar
expressions, among others, generally identify forward-looking
statements. Endologix and TriVascular caution that these
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially from those
indicated in the forward-looking statements. Such risks and
uncertainties include, but are not limited to, the likelihood that
the transaction is consummated on a timely basis or at all,
including whether the conditions required to complete the
transaction will be met, realization of the expected benefits of
the transaction, competition from other products, changes to laws
and regulations applicable to our industry, status of our ongoing
clinical trials, clinical trial results, decisions and the timing
of decisions of regulatory authorities regarding our products and
potential future products, risks relating to foreign currency
fluctuations, and a variety of other risks. Additional information
about the factors that may affect the companies' operations is set
forth in Endologix's and TriVascular's annual and periodic reports
filed with the Securities and Exchange Commission (the "SEC").
Neither Endologix nor TriVascular undertakes any obligation to
release publicly any revisions to forward-looking statements as a
result of subsequent events or developments, except as required by
law. TriVascular's results for the quarter ended September 30, 2015
are not necessarily indicative of operating results for any future
periods.
Additional Information and Where to Find It
The transaction referenced in this communication has not yet
commenced, and no proxies are yet being solicited. Endologix plans
to file a registration statement on Form S–4 ("S-4") that will
serve as a prospectus for Endologix shares to be issued as
consideration in the merger and as a proxy statement of TriVascular
for the solicitation of votes of TriVascular stockholders to
approve the proposed transaction (the "Proxy
Statement/Prospectus"). This communication is for informational
purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell shares. It is also not a
substitute for the S-4, the Proxy Statement/Prospectus or any other
documents that Endologix or TriVascular may file with the SEC or
send to stockholders in connection with the proposed transaction.
THE DEFINITIVE PROXY STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT
INFORMATION ABOUT ENDOLOGIX, TRIVASCULAR AND THE TRANSACTIONS.
TRIVASCULAR STOCKHOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES
AVAILABLE BEFORE MAKING ANY DECISION REGARDING VOTING ON THE
PROPOSED TRANSACTION.
In addition to the SEC filings made in connection with the
transaction, each of Endologix and TriVascular files annual,
quarterly and current reports and other information with the SEC.
Endologix's and TriVascular's filings with the SEC, including the
Proxy Statement/Prospectus once it is filed, are available to the
public free of charge at the website maintained by the SEC at
http://www.sec.gov. Copies of documents filed with the SEC by
TriVascular will be made available free of charge on TriVascular's
website at http://investors.trivascular.com. Copies of documents
filed with the SEC by Endologix will be made available free of
charge on Endologix's website at http://investor.endologix.com.
Participants in the Solicitation
Endologix, TriVascular and their respective directors and
executive officers may be deemed to be participants in any
solicitation of proxies from TriVascular's stockholders in
connection with the proposed transaction. Information regarding
Endologix's directors and executive officers is available in its
proxy statement for its 2015 annual meeting of stockholders, which
was filed with the SEC on April 17, 2015; information regarding
TriVascular's directors and executive officers is available in its
proxy statement for its 2015 annual meeting of stockholders, which
was filed with the SEC on April 14, 2015. Other information
regarding the interests of such potential participants will be
contained in the Proxy Statement/Prospectus when it becomes
available. You may obtain free copies of these documents as
described in the preceding paragraph.
| TRIVASCULAR
TECHNOLOGIES, INC. |
| Consolidated Statements
of Comprehensive Loss |
| (in thousands, except
per share data) |
| |
|
|
|
|
| |
Three Months
Ended |
Nine Months
Ended |
| |
September 30, |
September 30, |
| |
2015 |
2014 |
2015 |
2014 |
| |
(unaudited) |
| Revenue |
$ 9,455 |
$ 7,878 |
$ 27,213 |
$ 22,710 |
| Cost of goods sold |
3,453 |
3,372 |
10,571 |
10,500 |
| Gross profit |
6,002 |
4,506 |
16,642 |
12,210 |
| Operating expenses: |
|
|
|
|
| Sales, general and
administrative |
13,245 |
12,566 |
42,101 |
37,766 |
| Research and development |
4,173 |
4,047 |
12,317 |
11,919 |
| Total operating expenses |
17,418 |
16,613 |
54,418 |
49,685 |
| Loss from operations |
(11,416) |
(12,107) |
(37,776) |
(37,475) |
| Other income (expense): |
|
|
|
|
| Interest expense |
(2,102) |
(1,726) |
(5,888) |
(5,869) |
| Interest income and other income (expense),
net |
(13) |
11 |
(228) |
627 |
| Loss before income tax expense |
(13,531) |
(13,822) |
(43,892) |
(42,717) |
| Provision for income tax |
47 |
65 |
179 |
165 |
| Net loss |
$ (13,578) |
$ (13,887) |
$ (44,071) |
$ (42,882) |
| |
|
|
|
|
| Net loss per share, basic and diluted |
$ (0.66) |
$ (0.69) |
$ (2.17) |
$ (3.41) |
| |
|
|
|
|
| Weighted average shares used to compute net
loss per share, basic and diluted |
20,467 |
20,013 |
20,347 |
12,592 |
| |
|
|
|
|
| Other comprehensive (loss) income: |
|
|
|
|
| Change in foreign currency
translation adjustment |
(12) |
(212) |
57 |
(258) |
| Change in unrealized (loss)
gain on short-term investments |
2 |
-- |
10 |
-- |
| Other comprehensive income (loss) |
(10) |
(212) |
67 |
(258) |
| Comprehensive loss |
$ (13,588) |
$ (14,099) |
$ (44,004) |
$ (43,140) |
| |
|
|
|
|
Non-GAAP Financial Measures Reconciliation – Pro Forma
Net Loss Per Share
To facilitate the explanation of the earnings per share
calculation for the three and nine months ended September 30, 2015,
and 2014, we are also providing a pro forma calculation reflecting
conversion of our convertible preferred stock in connection with
the closing of our initial public offering in April 2014. Pro forma
basic and diluted net loss per share were computed to give effect
to the conversion of the convertible preferred stock which were
automatically converted into common stock upon the closing of our
initial public offering using the as-if converted method into
common shares as though the conversion had occurred as of
January 1, 2014, or the original date of issuance, if later.
The following table summarizes the unaudited pro forma net loss per
share (in thousands, except for per share data):
| |
Three Months
Ended |
Nine Months
Ended |
| |
September 30, |
September 30, |
| |
2015 |
2014 |
2015 |
2014 |
| |
|
|
|
|
| |
(unaudited) |
| Numerator |
|
|
|
|
| Net Loss |
$ (13,578) |
$ (13,887) |
$ (44,071) |
$ (42,882) |
| Add: Pro
forma adjustment to reverse the mark-to-market adjustments
attributable to the convertible preferred stock warrants |
-- |
-- |
-- |
(633) |
| Pro forma net loss |
$ (13,578) |
$ (13,887) |
$ (44,071) |
$ (43,515) |
| |
|
|
|
|
| Denominator |
|
|
|
|
| Weighted average shares used to
compute net loss per share, basic and diluted |
20,467 |
20,013 |
20,347 |
12,592 |
| Add: Pro
forma adjustments to reflect weighted average effect of conversion
of convertible preferred stock |
-- |
-- |
-- |
4,436 |
| Weighted average shares used to
compute pro forma net loss per share, basic and diluted |
20,467 |
20,013 |
20,347 |
17,028 |
| |
|
|
|
|
| Pro forma net loss per share, basic and
diluted |
$ (0.66) |
$ (0.69) |
$ (2.17) |
$ (2.56) |
| |
|
|
|
|
Non-GAAP Financial Measures Reconciliation
– EBITDA and Adjusted EBITDA
The following table presents a reconciliation of net loss to
EBITDA and Adjusted EBITDA for the periods presented (in
thousands):
| |
Three Months
Ended |
Nine Months
Ended |
| |
September 30, |
September 30, |
| |
2015 |
2014 |
2015 |
2014 |
| |
(unaudited) |
| |
|
|
|
|
| Net Loss |
$ (13,578) |
$ (13,887) |
$ (44,071) |
$ (42,882) |
| Interest expense |
2,102 |
1,726 |
5,888 |
5,154 |
| Interest expense, recognition of unamortized
discount on repayment of note payable |
-- |
-- |
-- |
715 |
| Provision for income taxes |
47 |
65 |
179 |
165 |
| Depreciation & amortization |
119 |
129 |
362 |
402 |
| EBITDA |
(11,310) |
(11,967) |
(37,642) |
(36,446) |
| Stock-based compensation |
1,163 |
565 |
3,468 |
1,700 |
| Change in value of warrants |
-- |
-- |
-- |
(633) |
| Adjusted EBITDA |
$ (10,147) |
$ (11,402) |
$ (34,174) |
$ (35,379) |
| |
|
|
|
|
| |
|
|
|
|
| TRIVASCULAR
TECHNOLOGIES, INC. |
| Consolidated Balance
Sheets |
| (in thousands, except
par value) |
| |
|
|
| |
September 30, |
December 31, |
| |
2015 |
2014 |
| |
(unaudited) |
|
| Assets |
|
|
| Current assets |
|
|
| Cash and cash equivalents |
$34,894 |
$32,896 |
| Short-term investments |
15,135 |
46,084 |
| Accounts receivable |
6,600 |
6,565 |
| Inventories, net |
9,534 |
8,570 |
| Prepaid expenses and other
current assets |
2,265 |
2,932 |
| Total current assets |
68,428 |
97,047 |
| Property and equipment, net |
1,093 |
1,248 |
| Goodwill |
8,259 |
8,259 |
| Other intangible assets |
1,182 |
1,182 |
| Other assets |
832 |
797 |
| Total assets |
$79,794 |
$108,533 |
| Liabilities and Stockholders'
Equity |
|
|
| Current liabilities |
|
|
| Accounts payable |
$2,780 |
$1,862 |
| Accrued liabilities and
other |
6,826 |
8,465 |
| Total current liabilities |
9,606 |
10,327 |
| Notes payable |
65,325 |
55,004 |
| Other long term liabilities |
3,335 |
3,629 |
| Total liabilities |
78,266 |
68,960 |
| |
|
|
| Stockholders' equity |
|
|
| Preferred stock, $0.01 par
value, 5,000 shares authorized, 0 shares issued and
outstanding at September 30, 2015, and December 31, 2014 |
-- |
-- |
| Common stock, $0.01 par value,
100,000 shares authorized, 20,446 and 20,168 shares issued and
outstanding at September 30, 2015, and December 31, 2014,
respectively |
204 |
202 |
| Additional paid-in capital |
341,402 |
335,445 |
| Accumulated other comprehensive
income |
(113) |
(180) |
| Accumulated deficit |
(339,965) |
(295,894) |
| Total
stockholders' equity |
1,528 |
39,573 |
| |
|
|
| Total
liabilities and stockholders' equity |
$79,794 |
$108,533 |
| |
|
|
CONTACT: Company Contact:
Michael R. Kramer
Chief Financial Officer
(707) 543-8709
Media Contact:
Vivek K. Jayaraman
VP, Global Sales & Marketing
(707) 543-8804
vivek.jayaraman@trivascular.com
Investor Relations Contact:
Westwicke Partners
Jamar Ismail
(415) 513-1282
Jamar.ismail@westwicke.com
TRIVASCULAR TECHNOLOGIES, INC. (NASDAQ:TRIV)
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TRIVASCULAR TECHNOLOGIES, INC. (NASDAQ:TRIV)
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