Full Press Release Details
Reports First Quarter 2017 Financial Results
leads to increase in trailing 12-month CytoSorb sales of $9.2 million
JUNCTION, N.J., May 8, 2017 - 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 March 31, 2017.
2017 Financial Highlights:
2017 Operational Highlights:
Dr. Phillip Chan, Chief Executive Officer
of CytoSorbents stated, "After a strong 2016 finish, we began 2017 with continued solid year-over-year growth and healthy
68% product gross margins, while adding new catalysts that are expected to accelerate sales through the remainder of 2017 and beyond.
Our trailing 12 month revenue is now $9.2 million, up from $8.2 million at the end of 2016. We continue to target operating profitability
before the end of 2018, based upon increased visibility and key factors outlined in our recent annual shareholder letter. These
include 1) Continued direct and distributor sales momentum of CytoSorb in key international markets 2) Significantly enhanced reimbursement
in our largest market of Germany and reimbursement progress in other major markets 3) The ramp of our co-marketing agreement with
Fresenius Medical Care (FMC) 4) Continued progress by our strategic partners, including FMC, Terumo Cardiovascular, Biocon, and
Dr. Reddy's in their exclusive sales territories, and 5) New clinical data driving the use of CytoSorb in different applications."
"In particular, we are pleased that
many hospitals in Germany, following first quarter negotiations of their 2017 operating budgets with the government, have reported
solid increases in reimbursement for CytoSorb under the new dedicated reimbursement code that includes the full cost of the device
as well as the procedure. Our sales force and customers in Germany have been eagerly awaiting the finalization of these rates,
as these data are very important to purchasing decisions. We expect many more hospitals to post similar reimbursement rates soon."
"Meanwhile, we continue numerous initiatives throughout
our business that are expected to help us meet the growing demand for CytoSorb. These include our recently announced
financing that gives us the capital for commercial expansion and to fund our clinical strategy; our ongoing buildout of a new manufacturing
facility at less than 20% of our previously budgeted cost by remaining on-site and leveraging our existing manufacturing infrastructure;
strengthening our U.S. clinical team with the planned start of our REFRESH 2 trial later this year, pending
FDA approval; and the pending launch of our new therapeutic extracorporeal membrane oxygenation (ECMO) kit that is designed to
accelerate this field beyond the 1,000+ treatments already performed."
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, May 8, 2017
Time: 4:45 PM Eastern
Participant Dial-In: 1-719-325-4929
Live Presentation Webcast: http://public.viavid.com/index.php?id=124222
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=124222
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/investor-relations/financial-results
Results of Operations
Comparison for the three months
ended March 31, 2017 and 2016:
Revenue from product sales was approximately
$2,596,000 in the three months ended March 31, 2017, as compared to approximately $1,597,000 in the three months ended March 31,
2016, an increase of approximately $999,000, or 63%. 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 $517,000
for the three months ended March 31, 2017 as compared to approximately $213,000 for the three months ended March 31, 2016, an increase
of approximately $304,000. This increase was a result of revenue recognized from new grants and billable milestones achieved on
As a result of the increases in both product
sales and grant income, for the three months ended March 31, 2017, we generated total revenue of approximately $3,114,000, as compared
to revenues of approximately $1,810,000, for the three months ended March 31, 2016, an increase of approximately $1,304,000 or
For the three months ended March 31, 2017
and 2016, cost of revenue was approximately $1,254,000 and $819,000, respectively, an increase of approximately $435,000. Product
cost of revenues increased approximately $228,000 during the three months ended March 31, 2017 as compared to the three months
ended March 31, 2016 due to increased sales. Product gross margins were approximately 68% for the three months ended March 31,
2017, as compared to approximately 62% for the three months ended March 31, 2016. This increase in gross margin was due to
a favorable mix of sales prices.
Research and Development Expenses:
For the three months ended March 31, 2017,
research and development expenses were approximately $470,000 as compared to research and development expenses of approximately
$856,000 for the three months ended March 31, 2016. The decrease of approximately $386,000 was due to a decrease in costs related
to our various clinical studies and trials of approximately $208,000, a decrease in salaries related to non-clinical research and
development activities of approximately $26,000, and an increase in direct labor and other costs being deployed toward grant-funded
activities of approximately $205,000, which had the effect of decreasing the amount of our non-reimbursable research and development
costs. These decreases were offset by an increase in our non-clinical research and development activities of approximately $53,000.
Legal, Financial and Other Consulting
Legal, financial and other consulting expenses
were approximately $280,000 for the three months ended March 31, 2017, as compared to approximately $255,000 for the three months
ended March 31, 2016. The increase of approximately $25,000 was due to an increase in employment agency fees of approximately $31,000
related to the recruitment of senior level personnel and an increase in legal fees of approximately $22,000 related to certain
corporate initiatives. These increases were offset by decreases in auditing and other consulting fees of approximately $28,000
due to fees incurred related to the audit of our internal controls as required by The Sarbanes-Oxley Act of 2002 in 2016 that did
Selling, General and Administrative
Selling, general and administrative expenses
were approximately $2,667,000 for the three months ended March 31, 2017, as compared to approximately $1,970,000 for the three
months ending March 31, 2016. The increase of $697,000 was due to increase in salaries, commissions and related costs of approximately
$320,000 due to headcount additions and personnel related costs, an increase in royalty expenses of approximately $94,000 due to
the increase in product sales, additional sales and marketing costs, which include advertising and conferences of approximately
$69,000, an increase in travel and entertainment and other costs of approximately $56,000, an increase in stock-based compensation
of approximately $89,000 related to restricted stock units awarded to the Company's executive staff during the year ended
December 31, 2016, an increase in rent expense of approximately $17,000 related to the new expanded office facility in Germany,
an increase in office supplies and related expenses of approximately $15,000 and other general and administrative cost increases
of approximately $37,000.
Interest Income (Expense):
For the three ended March 31, 2017, interest
expense was approximately $120,000, as compared to interest income of approximately $4,000 for the three ended March 31, 2016.
This increase in interest expense of approximately $124,000 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
Gain (Loss) on Foreign Currency Transactions:
For the three months ended March 31, 2017,
the gain on foreign currency transactions was approximately $153,000 as compared to approximately $232,000 for the three months
ended March 31, 2016. The 2017 first quarter gain is directly related to the increase in the exchange rate of the Euro at March
31, 2017 as compared to December 31, 2016. The exchange rate of the Euro to the U.S. dollar was $1.07 per Euro at March 31, 2017
as compared to $1.05 per Euro at December 31, 2016.
Change in Warrant Liability:
We recognize warrants as liabilities at