Full Press Release Details
CytoSorbents Reports Record Second Quarter
2019 Financial Results
Revenue was $6.2 million, with record quarterly product sales of $5.9 million and product gross margins of 76%
N.J., August 6, 2019 - CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader using its
CytoSorb blood purification technology to treat deadly inflammation in critically-ill and cardiac surgery patients
around the world, reports financial and operational results for the quarter ending June 30, 2019.
Second Quarter 2019 Financial Results:
Second Quarter 2019 Operational Highlights:
Dr. Phillip Chan, Chief Executive Officer
of CytoSorbents Corporation, stated, "Q2 2019 product sales rebounded significantly over the past quarter, achieving our
guidance as the best quarter of product sales since we began commercialization, and in-line with our historical product sales trajectory
of growth. Results were aided by the resumption of ordering from one of our major distributors. We also attained blended product
gross margins of 76%, an increase of 200 basis points from the prior quarter, primarily resulting from continued efficiencies in
manufacturing, and closing in on our goal of 80% on a quarterly basis this year."
"The new loan amendment with Bridge
Bank has expanded our effective working capital position by approximately $9 million, including deferment of principal repayments,
and will allow us to continue making the investments in our business that will drive future growth. We expect that product sales
in the second half of this year will solidly exceed product sales in the first half, catalyzed by the impact of our expanding sales
team, organic growth in existing markets, increased international expansion, publication of new clinical data in a wide variety
of clinical applications, and increased partner support."
Dr. Chan concluded, "Lastly, in the
independent editorial commentary to the REFRESH I paper that was recently published, we were pleased to note that the authors described
the complications of extended cardiopulmonary bypass - including the activation of inflammation, release of free hemoglobin
due to hemolysis, and organ injury and failure - as the Achilles heel of complex cardiac surgery', and that the holy
grail of research in this subject would be to find something able to mitigate or eliminate the mediators responsible for these
potentially catastrophic downstream effects of prolonged cardiopulmonary bypass.' In reality, CytoSorb has demonstrated utility
in so many different life-or-death applications in critical care and cardiac surgery, that we believe we are one of the leading
innovators in bringing game-changing advances to medicine."
"Please join us on our earnings conference call today,
details for which are below."
Conference Call Details:
Date: Tuesday, August 6, 2019
Time: 4:45 PM Eastern Time
Participant Dial-In: 877-451-6152
Conference ID: 13692360
Live Presentation Webcast: http://public.viavid.com/index.php?id=135206
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=135206
An archived 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 of Operations
Comparison for the three months ended
June 30, 2019 and 2018:
Revenue from product sales was approximately
$5,850,000 in the three months ended June 30, 2019, as compared to approximately $5,246,000 in the three months ended June 30,
2018, an increase of approximately $604,000, or 12%. This increase was driven by an increase in direct sales of approximately $520,000
resulting from sales to both new customers and repeat orders from existing customers and an increase in distributor sales of approximately
$84,000. In addition, sales were negatively impacted by approximately $357,000 as a result of the decrease in the average exchange
rate of the Euro to the U.S. dollar. For the three months ended June 30, 2019, the average exchange rate of the Euro to the U.S.
dollar was $1.12 as compared to an average exchange rate of $1.19 for the three months ended June 30, 2018.
Grant income was approximately $382,000
for the three months ended June 30, 2019 as compared to approximately $510,000 for the three months ended June 30, 2018, a decrease
of approximately $128,000 or 25%. This decrease was a result of timing of certain grant revenue.
Total revenues were approximately $6,233,000
for the three months ended June 30, 2019, as compared to total revenues of approximately $5,755,000 for the three months ended
June 30, 2018, an increase of approximately $478,000, or 8%.
For the three months ended June 30, 2019
and 2018, cost of revenue was approximately $1,834,000 and $1,786,000, respectively, an increase of approximately $48,000. Product
cost of revenues increased approximately $31,000 during the three months ended June 30, 2019 as compared to the three months ended
June 30, 2018 due to increased sales. Product gross margins were approximately 76% for the three months ended June 30, 2019 and
approximately 74% for the three months ended June 30, 2018.
Research and Development Expenses:
For the three months ended June 30, 2019,
research and development expenses were approximately $2,930,000 as compared to research and development expenses of approximately
$1,576,000 for the three months ended June 30, 2018. The increase of approximately $1,354,000 was due to an increase in clinical
trial costs of approximately $1,215,000, which is primarily related to our REFRESH 2-AKI trial, an increase in non-clinical research
and development salary related costs of approximately $11,000 and an increase in other non-clinical research and development costs
of approximately $150,000. These increases were offset by an increase in direct labor and other costs being deployed toward grant-funded
activities of approximately $18,000, which had the effect of decreasing the amount of our non-reimbursable research and development
costs, and a decrease in new product development costs of approximately $4,000.
Legal, Financial and Other Consulting
Legal, financial and other consulting expenses
were approximately $592,000 for the three months ended June 30, 2019, as compared to approximately $458,000 for the three months
ended June 30, 2018. The increase of approximately $134,000 was due to an increase in legal fees of approximately $28,000 related
to patent matters and certain corporate initiatives, an increase in consulting fees of approximately $55,000, an increase in employment
agency fees of approximately $31,000 and an increase in accounting fees of approximately $20,000.
Selling, General and Administrative
Selling, general and administrative expenses
were approximately $4,507,000 for the three months ended June 30, 2019, as compared to approximately $6,124,000 for the three months
ending June 30, 2018, a decrease of $1,617,000. The decrease of $1,617,000 was due to a decrease in non-cash stock compensation
of approximately $2,228,000, a decrease in travel and entertainment costs of approximately $64,000 and a decrease in other general
and administrative expenses of approximately $70,000. These decreases were offset by an increase in salaries, commissions and related
costs of approximately $588,000, additional sales and marketing costs, which include advertising and conferences of approximately
$92,000, an increase in royalty expenses of approximately $53,000 due to the increase in product sales and an increase in rent
expense of approximately $12,000 related to the expansion of manufacturing and office facilities.
Interest Expense, net:
For the three months ended June 30, 2019,
interest expense was approximately $215,000, as compared to interest expense of approximately $840,000 for the three months ended
June 30, 2018. This decrease in interest expense of approximately $625,000 was primarily a result of the settlement of the Success
Fee with Bridge Bank in the amount of $637,000 that became due in May 2018 in accordance with the terms of the 2016 Success Fee
Letter with Bridge Bank.
Gain (Loss) on Foreign Currency Transactions:
For the three months ended June 30, 2019,
the gain on foreign currency transactions was approximately $297,000 as compared to a loss of approximately $(794,000) for the
three months ended June 30, 2018. The 2019 gain was directly related to the increase in the spot exchange rate of the Euro to the
U.S. dollar at June 30, 2019 as compared to March 31, 2018. The spot exchange rate of the Euro to the U.S. dollar was $1.14 per
Euro at June 30, 2019, as compared to $1.12 per Euro at March 31, 2019. The 2018 loss was directly related to the decrease in the
spot exchange rate of the Euro at June 30, 2018 as compared to March 31, 2018. The spot exchange rate of the Euro to the U.S. dollar
was $1.17 per Euro at June 30, 2018, as compared to $1.23 per Euro at March 31, 2018.