Full Press Release Details
Continues Strong Growth in Q1 2016
sales up 127% from a year ago with continued consecutive quarterly growth
JUNCTION, N.J., May 9, 2016 - CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader commercializing
its flagship CytoSorb blood purification cartridge 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 March 31, 2016.
2016 Financial Highlights:
First Quarter 2016 Operational Highlights:
Chief Executive Officer of CytoSorbents stated, "We are pleased to report another record quarter of CytoSorb sales,
which reflects the continued and growing usage of CytoSorb by clinicians in a wide variety of clinical indications, particularly
sepsis and cardiac surgery. At our recent 3rd International CytoSorb Users Meeting, and our recent critical care
conferences in Germany and Belgium, it was extremely gratifying to witness the expanding list of applications where CytoSorb
is being successfully used to help save lives."
remainder of 2016," Dr. Chan continued, "we anticipate increased momentum in our core business, including potential:
work aggressively to drive to a potential inflection point in our business, operating cash flow breakeven, and the success of our
join us on our previously announced earnings call today at 4:45PM EST where we will cover our progress and discuss some of the
recent clinical studies 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: Monday, May 9, 2016
Time: 4:45 PM Eastern
Participant Dial-In: 1-719-325-2138
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=119325
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
Ended March 31, 2016 Financial Results
Revenue from product sales was approximately
$1,597,000 in the three months ended March 31, 2016, as compared to approximately $704,000 in the three months ended March 31,
2015, an increase of approximately $893,000, or 127%. 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 $213,000
for the three months ended March 31, 2016 as compared to approximately $19,000 for the three months ended March 31, 2015 as a result
of revenue recognized from new grants and billable milestones achieved on existing grants.
As a result of the increases in both product
sales and grant income, for the three months ended March 31, 2016, we generated total revenue of approximately $1,810,000, as compared
to revenues of approximately $723,000, for the three months ended March 31, 2015, an increase of approximately $1,087,000, or 150%.
For the three months ended March 31, 2016
and 2015, cost of revenue was approximately $819,000 and $304,000, respectively, an increase of approximately $515,000. Product
cost of revenues increased approximately $321,000 during the three months ended March 31, 2016 as compared to the three months
ended March 31, 2015 due to increased sales. Product gross margins were approximately 62% for the three months ended March 31,
2016, as compared to approximately 59% for the three months ended March 31, 2015. In addition, direct labor and other costs being
deployed toward grant-funded activities, increased approximately $194,000, which has the effect of increasing the amount of costs
allocated to cost of revenue.
Research and Development Expenses:
For the three months ended March 31, 2016,
research and development expenses were approximately $856,000 as compared to research and development expenses of approximately
$951,000 for the three months ended March 31, 2015. The decrease of approximately $95,000 in research and development expenses
was primarily due to an increase of $194,000 of direct labor and other costs being deployed toward grant-funded activities, which
had the effect of decreasing the amount of our non-reimbursable research and development costs. In addition, costs related to our
non-clinical research and development activities decreased by approximately $69,000. These decreases were offset by increases in
salaries and other costs related to our various clinical studies and trials of approximately $168,000 during the three months ended
March 31, 2016 as compared to the three months ended March 31, 2015.
Legal, Financial and Other Consulting
Legal, financial, and other consulting
expenses were approximately $255,000 for the three months ended March 31, 2016, as compared to approximately $216,000 for the three
months ended March 31, 2015. The increase of approximately $39,000 was due to an increase in accounting and auditing fees of approximately
$47,000 due to fees incurred related to the initial audit of our internal controls as required by The Sarbanes-Oxley Act of 2002
and an increase in legal fees of approximately $29,000. These increases were offset by approximately $37,000 in employment agency
and consulting fees incurred in 2015 related to the hiring of senior level personnel that did not recur in 2016.
Selling, General and Administrative
Selling, general, and administrative expenses
were approximately $1,970,000 for the three months ended March 31, 2016, as compared to approximately $1,515,000 for the three
months ending March 31, 2015. The increase of approximately $455,000 in selling, general, and administrative expenses was due to
an increase in salaries, commissions, and related costs of approximately $241,000 due to headcount additions and increases in product
sales, an increase in royalty expenses of approximately $62,000 due to the increase in sales, additional sales and marketing costs,
which include advertising and conferences, of approximately $85,000, and an increase in travel and entertainment costs and other
expenses of approximately $67,000 due to the increased volume.
Gain (Loss) on Foreign Currency Transactions:
For the three months ended March 31, 2016,
the gain on foreign currency transactions was approximately $232,000 as compared to a loss of approximately $449,000 for the three
months ended March 31, 2015. The 2016 first quarter gain is directly related to the increase in the exchange rate of the Euro at
March 31, 2016 as compared to December 31, 2015. The exchange rate of the Euro to the U.S. dollar was $1.14 per Euro at March 31,
2016 as compared to $1.08 per Euro at December 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 income of approximately $18,000 for the three months ended March 31, 2016, and a charge to other expense of approximately
$2,008,000 for the three months ended March 31, 2015. The change in warrant liability was a result of the change in the fair value
of the warrant liability from December 31, 2015 to March 31, 2016 and from December 31, 2014 to March 31, 2015.
Liquidity and Capital Resources
Since inception, our operations have been
primarily financed through the private placement of debt and equity securities. At March 31, 2016, we had current assets of approximately
$8,041,000 including cash on hand and short-term investments of approximately $6,027,000 and current liabilities of approximately
$3,248,000. We believe we have sufficient cash to fund our operations into the fourth quarter of 2016; however, we may need to
raise additional capital to fully fund pivotal trials in the United States and/or Germany. We will be better able to assess this
need once the specific protocols are finalized with appropriate regulatory bodies. In addition, we may require additional capital
to support our sales and marketing efforts, to fund clinical studies, to expand our production capacity, to further develop our
products, and for general working capital purposes.
Second Quarter Revenue Guidance
CytoSorbents has not historically given
financial guidance on quarterly results until the quarter has been completed. However, we continue to expect our second quarter
2016 product sales to meet or exceed the level of sales achieved in the second quarter of 2015.
information please see the Company's Form 10-Q for the quarter ended March 31, 2016 filed on May 9, 2016 on http://www.sec.gov.
CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorb is approved in the European
Union with distribution in 32 countries around the world, as a safe and effective extracorporeal cytokine adsorber, designed to
reduce the "cytokine storm" or "cytokine release syndrome" that could otherwise cause massive inflammation,