Full Press Release Details
Achieves Fourth Consecutive Quarter of Record CytoSorb Sales
Revenues Up 140% over Q2 2015, REFRESH I Trial Nearing Completion
JUNCTION, N.J., August 9, 2016 - CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader commercializing
its flagship CytoSorb blood filter 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 June 30, 2016.
2016 Financial Highlights:
Second Quarter 2016 Operational Highlights:
Chan, President and Chief Executive Officer of CytoSorbents, stated "Momentum continues to build in our core CytoSorb
business, enabling us to post our fourth consecutive quarter of record product sales. Reorders from existing direct customers and
distributors continue to make up the bulk of our revenue, resulting in healthy organic growth for the quarter."
"We also continue to make excellent progress in our broader business. In the last earnings report, we laid out many of our
2016 objectives. We are pleased to report solid execution against that plan, including achieving continued sales growth of CytoSorb ,
strengthening our balance sheet at an attractive cost of capital, receiving substantial new grants that have enabled new product
categories, driving REFRESH I towards completion, transitioning to more revenue generating countries, securing new analyst coverage
with greater market awareness, and publication of more clinical data. We anticipate an even stronger second half of 2016."
join us on our previously announced earnings call today at 4:45PM EST where we will cover our progress in more detail. 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: Tuesday, August 9, 2016
Time: 4:45 PM Eastern
Participant Dial-In: 1-719-457-2714
Live Presentation Webcast: http://public.viavid.com/index.php?id=120613
It is recommended 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=120613
An archived recording of the conference
call will be available within a week under the Investor Relations section of the Company's website at http://www.cytosorbents.com/invest.htm
Financial results for the second
quarter ended June 30, 2016:
Revenue from product sales was approximately
$1,853,000 in the three months ended June 30, 2016, as compared to approximately $773,000 in the three months ended June 30, 2015,
an increase of approximately $1,080,000, or 140%. 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.
Grant income was approximately $370,000
for the three months ended June 30, 2016 as compared to approximately $180,000 for the three months ended June 30, 2015, an increase
of approximately $190,000, or 106%. This increase was a result of revenue recognized from new grants.
As a result of the increases in both product
sales and grant income, for the three months ended June 30, 2016, we generated total revenue of approximately $2,222,000, as compared
to total revenue of approximately $964,000 for the three months ended June 30, 2015, an increase of approximately $1,258,000, or
For the three months ended June 30, 2016
and 2015, cost of revenue was approximately $873,000 and $465,000, respectively, an increase of approximately $408,000. Product
cost of revenues increased approximately $313,000 during the three months ended June 30, 2016 as compared to the three months ended
June 30, 2015 due to increased sales. Product gross margins increased to approximately 68% for the three months ended June 30,
2016, as compared to approximately 63% for the three months ended June 30, 2015, due to a favorable mix of sales prices. Grant
income related expenses increased due to direct labor and other costs being deployed toward grant-funded activities, an increase
of approximately $95,000 during the three months ended June 30, 2016 as compared to the three months ended June 30, 2015.
Research and Development Expenses:
For the three months ended June 30, 2016,
research and development expenses were approximately $1,092,000, as compared to research and development expenses of approximately
$802,000 for the three months ended June 30, 2015, an increase of approximately $290,000. This increase was due to an increase
in costs related to the various clinical studies of approximately $353,000, and increases in salaries and other research and development
costs of approximately $32,000. The increase was offset by an increase in direct labor and other costs being deployed toward grant-funded
activities of approximately $95,000, which had the effect of decreasing the amount of our non-reimbursable research and development
Legal, Financial and Other Consulting Expense:
Legal, financial and other consulting expenses
were approximately $319,000 for the three months ended June 30, 2016, as compared to approximately $298,000 for the three months
ended June 30, 2015, an increase of approximately $21,000. This increase was due to an increase in accounting fees of approximately
$13,000 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 legal and other consulting fees of approximately $8,000.
Selling, General and Administrative
Selling, general and administrative expenses
were approximately $2,625,000 for the three months ended June 30, 2016, as compared to approximately $1,626,000 for the three months
ending June 30, 2015, an increase of approximately $999,000. This increase was due to an increase in salaries, commissions and
related costs of approximately $506,000 due to headcount additions and increases in product sales, an increase in royalty expenses
of approximately $77,000 due to the increase in sales, additional sales and marketing costs, which include advertising, and conferences
of approximately $43,000, an increase in travel and entertainment costs and other expenses of approximately $29,000 due to the
increased volume, and an increase in stock-based compensation of approximately $366,000 due to 2015 milestone options awarded to
the Company's employees and restricted stock units awarded to the Company's executive staff during the three months
ended June 30, 2016. These increases were offset by a decrease in stock exchange listing and transfer fees of approximately $13,000
as a result of fees incurred related to our public offering in 2015 that did not recur in 2016 and decreases in other general and
administrative costs of approximately $9,000.
Gain (Loss) on Foreign Currency Transactions:
For the three months ended June 30, 2016,
the loss on foreign currency transactions was approximately $129,000 as compared to a gain of approximately $62,000 for the three
months ended June 30, 2015. The loss for the three months ended June 30, 2016 is directly related to the decrease in the exchange
rate of the Euro at June 30, 2016 as compared to March 31, 2016. The exchange rate of the Euro to the U.S. dollar was $1.12 per
Euro at June 30, 2016 as compared to $1.14 per Euro at March 31, 2016. The gain for the three months ended June 30, 2015 is directly
related to the increase in the exchange rate of the Euro at June 30, 2015 as compared to March 31, 2015. The exchange rate of the
Euro to the U.S. dollar was $1.11 per Euro at June 30, 2015 as compared to $1.08 per Euro at March 31, 2015.
Change in Warrant Liability:
We recognize 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 $191,000 for the three months ended June 30, 2016, and other income of approximately
$3,597,000 for the three months ended June 30, 2015. The change in warrant liability was a result of the change in the fair value
of the warrant liability from March 31, 2016 to June 30, 2016 and from March 31, 2015 to June 30, 2015.
Our net loss for the three months ended
June 30, 2016 was approximately $3,005,000, as compared to a net income of approximately $1,434,000 for the three months ended
June 30, 2015. Net income for 2015 included income of approximately $3,597,000 as a result of the reduction in the warrant liability
which is a non-cash component of other income/expense.
Cash and Short-Term Investments:
On June 30, 2016, our cash and short-term
investments were approximately $8,919,000, as compared to cash and short-term investments of approximately $7,508,000 as of December
31, 2015. This increase in cash is a direct result of the $4,910,000 net proceeds received on long-term debt, offset by cash used
in operating activities.
Financial results for the six months
ended June 30, 2016:
Revenue from product sales was approximately