Full Press Release Details
Q3 2016 Sales Reach Record $2.14M, Doubling From a Year Ago
$2M in CytoSorb Quarterly Sales for the First Time, and $2.4M in Total Revenue
JUNCTION, N.J., November 7, 2016 - CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy
leader commercializing its flagship CytoSorb cytokine adsorber to prevent or treat deadly inflammation and organ failure
in critically-ill and cardiac surgery patients around the world, reports financial and operational results for the quarter ending
Quarter 2016 Financial Highlights:
Quarter 2016 Operational Highlights:
Chan, Chief Executive Officer of CytoSorbents stated, "We finished another exceptional quarter, exceeding $2 million in
quarterly CytoSorb revenue for the first time in our history, driven by continued strength among our direct sales territories,
and orders from our broad distributor and strategic partner network. With healthy product gross margins of 68%, we continue to
demonstrate the vigor of our pure high margin disposables business."
continued to invest in potential future catalysts with the goal of driving operational profitability in the near term. Focusing
on sales, we have strengthened our direct and international sales infrastructure with the addition of key personnel, added more
distributors and converted more countries to revenue producing accounts, and expanded our higher margin direct sales territories.
In addition, we have worked closely with strategic partners Fresenius, Terumo Cardiovascular, and Biocon, to ensure that their
significant contributions of resources are being used optimally. In particular, we are pleased that Terumo will begin selling
CytoSorb very soon, just months after signing our partnership agreement. We have also refined our manufacturing processes to optimize
production of CytoSorb at lower cost. Finally, the clinical data on CytoSorb continues to develop, most recently with the completion
of REFRESH I, where we were the first to demonstrate safety of intraoperative CytoSorb usage during complex cardiac surgery in
a randomized controlled trial. Pending discussions with the FDA, we anticipate a pivotal REFRESH 2 trial to begin next year, designed
to support U.S. approval."
to finish 2016 in a much stronger commercial position than when we started, with a CytoSorb sales run rate of approximately $8.6
million as of the third quarter. It is a testament to the hard work and effort of all of the people and organizations that we
work with, that we are in this favorable position."
join us on our previously announced earnings call today at 4:45PM EST where we will cover our progress. We will also respond to
questions from the audience during our live Q&A session. The investor presentation and a written transcript of the conference
call will be available within a week of the webcast."
Conference Call Details:
Date: Monday, November 7, 2016
Time: 4:45 PM Eastern
Participant Dial-In: 1-719-457-2605
Live Presentation Webcast: http://public.viavid.com/index.php?id=121492
that participants dial in approximately 10 minutes prior to the start of the call. There will also be a simultaneous live
webcast of the conference call that can be accessed through the following audio feed link: http://public.viavid.com/index.php?id=121492
recording of the conference call will be available under the Investor Relations section of the Company's website at http://cytosorbents.com/investor-relations/financial-results/.
Results for the Third Quarter Ended September 30, 2016
product sales was approximately $2,143,000 in the three months ended September 30, 2016, as compared to approximately $1,071,000
in the three months ended September 30, 2015, an increase of approximately $1,072,000, or 100%. This increase was largely driven
by an increase in direct sales from both new customers and repeat orders from existing customers, along with an increase in distributor sales.
was approximately $269,000 for the three months ended September 30, 2016 as compared to approximately $272,000 for the three months
ended September 30, 2015, a decrease of approximately $3,000, or 1%.
of the increase in product sales, for the three months ended September 30, 2016, we generated total revenue of approximately $2,412,000,
as compared to total revenue of approximately $1,344,000 for the three months ended September 30, 2015, an increase of approximately
months ended September 30, 2016 and 2015, cost of revenue was approximately $964,000 and $639,000, respectively, an increase of
approximately $325,000. Product cost of revenues increased approximately $283,000 during the three months ended September 30,
2016 as compared to the three months ended September 30, 2015 due to increased sales. Product gross margins increased to approximately
68% for the three months ended September 30, 2016, as compared to approximately 63% for the three months ended September 30, 2015
due to a favorable mix of sales prices. Grant income related expenses decreased by approximately $50,000 during the three months
ended September 30, 2016 as compared to the three months ended September 30, 2015.
and Development Expenses:
months ended September 30, 2016, research and development expenses were approximately $1,172,000, as compared to research and
development expenses of approximately $866,000 for the three months ended September 30, 2015, an increase of approximately $306,000.
This increase was due to an increase in costs related to the various clinical studies, primarily due to our REFRESH 1 trial costs,
of approximately $386,000 and a decrease in direct labor and other costs being deployed toward grant-funded activities of approximately
$50,000, which had the effect of increasing the amount of our non-reimbursable research and development costs. These increases
were offset by decreases in patent related costs of approximately $13,000, decreases in non-grant related supplies of approximately
$72,000 and decreases in other research and development costs of approximately $45,000.
Legal, Financial and Other
and other consulting expenses were approximately $279,000 for the three months ended September 30, 2016, as compared to approximately
$289,000 for the three months ended September 30, 2015, a decrease of approximately $10,000. This decrease was due to a decrease
in employment agency fees of approximately $58,000 relating to 2015 fees incurred from the hiring of senior level personnel that
did not recur in 2016 and a decrease in legal fees of approximately $25,000. This decrease was offset by an increase in accounting
fees of approximately $20,000 due to fees incurred related to the audit of our internal controls as required by the Sarbanes-Oxley
Act of 2002 and an increase in consulting fees of approximately $53,000.
General and Administrative Expense:
and administrative expenses were approximately $2,141,000 for the three months ended September 30, 2016, as compared to approximately
$1,700,000 for the three months ending September 30, 2015, an increase of approximately $441,000. This increase was due to an
increase in salaries and related costs of approximately $348,000 resulting from headcount additions, commissions, and personnel
related costs, an increase in royalty expenses of approximately $73,000 due to the increase in sales, an increase in travel and
entertainment costs and other expenses of approximately $50,000 due to the increased activity and an increase in stock-based compensation
of approximately $25,000 due to the number of employees receiving options during the three months ended September 30, 2016 as
compared to the three months ended September 30, 2015. These increases were offset by a decrease in stock exchange listing and
stock transfer fees of approximately $15,000 which were incurred in connection with our public offering in 2015 that did not recur
in 2016, a decrease in public relations fees of approximately $17,000 and decreases in other general and administrative costs
of approximately $23,000.
months ended September 30, 2016, interest expense amounted to approximately $117,000 as compared to interest income of approximately
$3,000 for the three months ended September 30, 2015. This increase in expense of approximately $120,000 is directly related to
interest expense incurred and amortization of loan acquisition costs related to the Company's financing facility with Bridge
Bank on which $5,000,000 was drawn on June 30, 2016.
(Loss) on Foreign Currency Transactions:
months ended September 30, 2016 and 2015, the gain on foreign currency transactions was approximately $73,000 and $71,000, respectively.
The gain for the three months ended September 30, 2016 is directly related to the increase in the exchange rate of the Euro at
September 30, 2016 as compared to June 30, 2016. The exchange rate of the Euro to the U.S. dollar was $1.12 per Euro at September
30, 2016 as compared to $1.11 per Euro at June 30, 2016. The gain for the three months ended September 30, 2015 is directly related
to the increase in the exchange rate of the Euro at September 30, 2015 as compared to June 30, 2015. The exchange rate of the
Euro to the U.S. dollar was $1.12 per Euro at September 30, 2015 as compared to $1.11 per Euro at June 30, 2015.
in Warrant Liability:
warrants as liabilities at their fair value on the date of the grant because of price adjustment provisions in the warrants, then
measure the fair value of the warrants on each reporting date, and record a change to the warrant liability as appropriate. The
change in warrant liability resulted in other expense of approximately $495,000 and $771,000 for the three months ended September
30, 2016 and 2015, respectively. The change in warrant liability was a result of the change in the fair value of the warrant liability
from June 30, 2016 to September 30, 2016 and from June 30, 2015 to September 30, 2015. See Note 4 to the consolidated financial
statements for details related to the calculation of the fair value of the warrant liability.
operations for the three months ending September 30, 2016 was approximately $2,683,000, as compared to a net loss from operations
of approximately $2,847,000 for the three months ended September 30, 2015.
Financial Results for the
Nine Months Ended September 30, 2016:
product sales was approximately $5,593,000 in the nine months ended September 30, 2016, as compared to approximately $2,548,000
in the nine months ended September 30, 2015, an increase of approximately $3,045,000, or 120%. This increase was largely driven
by an increase in direct sales from both new customers and repeat orders from existing customers, along with an increase in distributor sales.