Full Press Release Details
A. Hurwitz, Chief Financial Officer
MRI INTERVENTIONS, INC. ANNOUNCES 2015
THIRD QUARTER RESULTS
November 3, 2015 - MRI Interventions, Inc. (OTCQB: MRIC) today announced financial results for the third quarter ended September
Quarter Ended September 30, 2015
Revenues were $1.2 million
for the three months ended September 30, 2015, and $633,000 for the same period in 2014, an increase of $613,000, or 97%, attributable
to increases in the Company's ClearPoint System reusable and disposable products.
ClearPoint disposable product
sales for the three months ended September 30, 2015 were $970,000, compared with $577,000 for the same period in 2014, representing
an increase of $393,000, or 68%. This increase was due primarily to a greater number of procedures performed using the ClearPoint
system within a larger installed base for ClearPoint, relative to the 2014 period.
ClearPoint reusable product sales for the three
months ended September 30, 2015 were $239,000, and $11,000 for the same period in 2014. Reusable products consist primarily of
computer hardware and software bearing sales prices that are appreciably higher than those for disposable products and historically
have fluctuated from quarter to quarter.
Gross margin on product revenues was 54% for
the three months ended September 30, 2015, compared to 46% for the same period in 2014. The improvement was attributable primarily
to increased average unit selling prices, decreased unit costs and greater production efficiencies arising from increased volume
in the 2015 period, relative to the 2014 period.
Research and development costs were $480,000
for the three months ended September 30, 2015, compared to $873,000 for the same period in 2014, a decrease of $393,000, or 45%.
Approximately $229,000 of the decrease related to reduced spending on the Company's ClearTrace development program, and $61,000
related to reductions in sponsored research.
Selling, general and administrative expenses
were $2.1 million for each of the three-month periods ended September 30, 2015 and 2014.
During the three months ended September 30,
2015, the Company recorded a gain of $1.95 million, and during the three months ended September 30, 2014, it recorded a loss of
$781,000, from changes in the fair value of derivative liabilities associated with certain warrants the Company issued in private
placement transactions.
Musick, Irvine, California 92618 949.900.6833
Nine Months Ended September 30, 2015
Revenues were $3.1 million for the nine months
ended September 30, 2015, and $2.6 million for the same period in 2014, an increase of $438,000, or 17%, primarily attributable
to growth in the Company's disposable products sales, driven by growth in ClearPoint enabled procedures.
ClearPoint disposable product sales for the
nine months ended September 30, 2015 were $2.5 million, compared with $1.9 million for the same period in 2014, representing an
increase of $580,000, or 30%. This increase is due primarily to the aforementioned growth in procedures and the size of the ClearPoint
system installed base.
ClearPoint reusable product sales for the nine
months ended September 30, 2015 were $469,000, compared with $492,000 for the same period in 2014, representing a decrease of $23,000,
Gross margin on product revenues for the nine
months ended September 30, 2015 was 55%, compared to gross margin of 49% for the corresponding period in 2014. The improvement
was attributable primarily to increased average unit selling prices, decreased unit costs and greater production efficiencies arising
from increased volume in the 2015 period, relative to the 2014 period.
Research and development costs were $1.4 million
for the nine months ended September 30, 2015, compared to $2.6 million for the same period in 2014, a decrease of $1.2 million,
or 45%. Approximately $592,000 of the decrease related to a reduction in spending on the Company's ClearTrace development
program and $200,000 related to reductions in sponsored research.
Selling, general and administrative expenses
were $6.6 million for the nine months ended September 30, 2015, compared with $5.8 million for the same period last year, an increase
of $817,000, or 14%. The increase was primarily attributable to an increase during the nine months ended September 30, 2015 in
cash compensation costs of approximately $466,000, a portion of which was associated with overlapping executives' terms of
employment so as to provide for a coordinated transition of duties during the period in which the Company, as previously announced,
consolidated its business functions into its Irvine, California headquarters and closed its executive offices in Memphis, Tennessee.
Also contributing to the increase was an increase in share-based compensation of $417,000.
In March 2015, the Company announced the consolidation
of all major business functions into its Irvine, California headquarters. In connection with this consolidation, the Company closed
its Memphis, Tennessee office in May 2015. The Company did not retain any of its Memphis-based employees. A total of seven employees
were impacted by the consolidation, including three executives, whose termination of employment triggered a modification in the
terms of stock options previously granted to them. In connection with this consolidation, the Company recorded restructuring charges
of $1.3 million during the nine months ended September 30, 2015, primarily related to severance costs, and to the revaluation of
the stock options with modified terms and the resulting accrual of additional share-based compensation expense.
During the nine months ended September 30, 2014,
the Company recorded a gain of $4.3 million related to the sale of certain intellectual property to Boston Scientific. The purchase
price was satisfied through the cancellation of related party convertible notes payable the Company previously issued to Boston
Scientific in the aggregate principal amount of $4.3 million. The Company recorded a gain equal to the purchase price, as the assets
sold had not been previously recorded on its balance sheet.
During the nine months ended September 30, 2015
and 2014, the Company recorded gains of $981,000 and $578,000, respectively, resulting from changes in the fair value of derivative
liabilities associated with certain warrants the Company issued in private placement transactions.
Management's Comments
"We are pleased with the business's
progress as reflected in our third quarter results. Revenues showed strong growth overall, and in particular, ClearPoint disposables
in the 2015 third quarter grew 68% from the same period in 2014, while total revenue grew 97%. This reflects the growing procedural
adoption of ClearPoint, and the impact of laser ablation on our business. Laser cases in Q3 were once again nearly a quarter of
our mix, with application in both tumor and hippocampal ablation cases. Surgeons are recognizing our strong value proposition in
laser ablation, and we expect these cases will be an increasingly larger portion of our procedures.
"We exhibited at the Congress of Neurological
Surgeons meeting in New Orleans in September, and interest in the use of our products for laser ablation was particularly high.
At a "lunch and learn" we co-sponsored with Medtronic, more than 140 attendees were present to hear leading neurosurgeons
speak to their experience with ClearPoint in a variety of procedures, including electrode placement, laser ablation and drug delivery.
We have had several recent inquiries regarding participation in additional drug delivery trials, and expect to move forward on
these in the next couple of quarters.
"This was our first full quarter as a
newly focused company headquartered in Irvine, CA. The efforts we have made in focusing and streamlining the Company are reflected
in noticeably lower cash utilization for operating activities, which was $1.6 million in Q3. This is a reduction of more than 40% from each
of the last two quarters, and we expect to see continued efficiencies going forward.
"As we enter the fourth quarter of the
year, we see growing adoption of our technology, greater efficiency in our company, and numerous opportunities for additional drug
delivery partnerships. Our revenue was up 97%, and our expenses were down significantly. We are focused and well positioned to
create the future of MRI guided neuro-navigation for a variety of neurosurgical procedures."
Teleconference Information:
Investors and analysts
are invited to listen to a live broadcast review of the Company's 2015 third quarter financial results today at 4:30 p.m. Eastern
Time (1:30 p.m. Pacific Time) that may be accessed by visiting the Company's website at www.mriinterventions.com and selecting
"Investors" / "News" / "IR Calendar." The conference call may also be accessed at http://mriinterventions.equisolvewebcast.com/q3-2015.
Investors and analysts who would like to participate in the conference call may do so via telephone at (877) 407-9034, or at (201)
493-6737 if calling from outside the U.S. or Canada.
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